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Exports a boon for Western lumber industry

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EUGENE, Ore. (AP) -- Exports have been one bright point for the struggling Western lumber industry as homebuilding remains stagnant.

Lumber exports from the western United States to Asia were up 30 percent for the first four months of this year, Hakan Ekstrom, president of Seattle-based Wood Resources International, told the Register-Guard Newspaper of Eugene .

That's giving a boost to some mills that sell overseas, and that has helped boost prices by reducing the domestic supply.

“We haven't sold any wood offshore, but I'm sure we've benefited in the North American market by having (some mills) send some of their wood offshore, leaving less wood here to choose from,” said Richard Re, general manager of Seneca Sawmill Co. in Eugene.

But analysts say it's a double-edged saw: Chinese buyers have mostly been buying raw logs rather than finished lumber, and that raises the costs of logs for mills that sell finished lumber domestically.

Prices for finished lumber in the U.S. haven't risen fast enough to cover the higher cost of logs for some of those mills.

Analysts say the Western lumber industry is slowly improving after bottoming out in 2009.

Sawmills in 12 Western states produced 11.1 billion board feet of lumber last year, up 7 percent from 2009.

Last year, Oregon harvested 3.2 billion board feet of timber, up 18.5 percent from the 2009 harvest.

“It sure seems to us that 2009 was the worst, 2010 was better, and 2011 a bit better than that,” Re said. “If we could see continued improvement that would be nice. We think that's going to happen.”

Robbie Robinson, part owner and CEO at Starfire Lumber Co., also sees gradual improvement at his mill in Cottage Grove.

“The first half (of 2011) went better than it sure has the past couple of years,” he said. “There's been a little more demand for product, and there's been some pricing adjustments. I think we'll be probably OK through September, maybe mid-October at the outside.”

Starfire began exporting lumber to Japan several years ago. That business picked up after the earthquake and tsunami in March that devastated a large swath of northern Japan.

Starfire has been exporting “hirakaku,” a type of small framing timber, to Japan, Robinson said. “They're doing a lot of temporary stuff north of Tokyo,” he said.

“They've got 450,000 homeless people and they've got to get some sort of roof over their head before winter.”

The mill's 50 employees will work 40 hours a week at least through this month, and maybe through September, Robinson said. Depending on the amount of work, his crew often runs 32 hours a week, he said.

Weyerhaeuser Co. spokesman Greg Miller said export markets were OK in the first half of the year, but “we're starting to see a slowdown in the second half,” he said.

Weyerhaeuser employs 200 workers at its sawmill in Cottage Grove and 400 workers at its engineered wood products division in Eugene.

“There's a lot of uncertainty out there, especially in light of what we've witnessed (recently),” he said. “Consumer confidence is down. Folks are very uncertain about what's happening in the broader context of the financial markets. So consumers tend to be more conservative and pull in their investments, particularly their large investments like a home.”

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