PORT ANGELES — After hitting levels not seen in nearly two decades, log exports from the North Olympic Peninsula are expected to take a drop next year.
A growing appetite for logs in China made exports skyrocket this year, from 20.25 million board feet in 2010 — which itself reached an 11-year high — to a projected height of 80 million board feet by year’s end.
The evidence can be seen along the Port Angeles waterfront, where logs are continually stacked high while waiting to be loaded into containers or onto log ships.
But tightening credit restrictions in China combined with a backlog of timber are expected to create a drop in demand, industry analysts and log exporters said.
“There are too much logs over in China now,” said Hakan Ekstrom, president of Wood Resources International LLC.
“They haven’t used as many logs as they have expected, so they have huge inventories of logs in the ports over in China.”
The Port of Port Angeles is projecting exports to drop to 65 million board feet in 2012.
Mike Nimmo, port marine facilities marketing manager, said in an email that he expects exports to drop the first half of the year but begin slowly increasing again afterward.
Paul Stutesman, log marketing vice president for Merrill & Ring, said he expects China to continue to be a customer for Peninsula logs in the long run, despite the projected decrease.
“I think long-term, we see China as a valuable market for fiber,” he said.
Stutesman said the Chinese market has been a real “shot in the arm” for the timber company.
“We’re at the highest [harvest] levels since 2007, that’s for sure,” he said.
The export market has also been good for the Port Angeles Hardwood mill, according to mill President Lindsay Crawford.
Crawford said lumber exports now make up about 40 percent of production at the mill, compared with 15 percent to 20 percent before the recession, and have helped make up for the drop in domestic demand that followed the collapse of the housing market.
“The only place there are strong business conditions in the world is in Asia,” he said.
But the export of logs also presents a downside for lumber manufacturers.
Crawford said the cost of logs is up about 20 percent this year, largely due to foreign sales.
The mill exports lumber through the ports of Tacoma and Seattle, he said.
Logs ready to be exported can be seen stacked in two areas along the Port Angeles waterfront: at the port’s log yard and at Peninsula Plywood.
PenPly, which is now closed, has operated a debarking machine to prepare logs for export.
The company sold the machine last year to Dkoram, the U.S. subsidiary of a South Korean log importer, but continued to operate it, said Grant Munro, a PenPly owner.
Munro also owns Munro LLC, which acts as a broker for the export of logs, including those debarked at PenPly.
He said another operator should be found shortly and he doesn’t expect PenPly’s closure to affect exports.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
