Southern Comments

GENERAL

Comments from 12/20/2024

To all our subscribers, contacts, and other industry friends – We appreciate you. We wish you the best of the holiday season, a new year of health and success, and the time to enjoy them all!

For most companies in the hardwood industry, this was the last full week of business before taking time off for the Christmas and New Year’s holidays. Sawmill operators and resellers were busy arranging shipments before customers stopped inbound lumber ahead of the holidays. There was also a push by green lumber buyers to process receipts before scheduled downtime.

ASH

Most suppliers have decent order files for kiln dried Ash, but shipments are likely to slow until after the first of the year. Inventories are thin for Fas, though adequate for the common grades. Reported prices are firm for 4/4 Fas and steady for most other grades and thicknesses. Green production remains controlled, with area mills shipping developing output at prices closely aligned to the #2A&Btr listings.

BEECH

COTTONWOOD

Domestic and international demand for kiln dried Cottonwood remains slow. However, production has not been excessive, and inventories are described as manageable for most items. No changes are warranted to the #1C&Btr figures. Interest in green low grade Cottonwood lumber and pallet cants is lethargic, while markets for #1C&Btr are steady. Prices vary by grade, but the #2B&Btr listings are representative of reported pricing.

PECAN & HICKORY

Buyers have been controlling green Pecan and Hickory purchases most of the year and are especially cautious with receipts at year’s end. Production is not extremely high but is exceeding the market’s needs. Information decreases the 5/4 Fas&1f listings, as well as all published thicknesses of #1C and #2A.

MIXED SOFT HARDWOODS

SAP GUM

SOFT MAPLE

#2A&3A OAK

Markets for low grade Oak have been negatively impacted by weak solid wood flooring markets most of this year. The truck trailer and residential sectors have experienced declining demand for finished goods, resulting in reduced needs for raw materials. The 4/4 through 6/4 #2A&3A Red Oak and 4/4 #2A&3A White Oak listings are reduced.

RED OAK

Kiln dried Red Oak business slowed last week, due more to a seasonal slowdown than a trend shift. Fas prices are firm and hold steady this week, while information raises the 4/4 #1C listings. No changes are required to the #2A figures. Mills are shipping total green production, but demand is best for Fas&1f. Interest in #1C is high from concentration yards, though solid wood flooring plants are purchasing lumber sparingly. Markets for #2A&3A are competitive, which is impacting pricing. The 4/4 through 6/4 #2A&3A listings decline.

WHITE OAK

White Oak log supplies to local mills have improved because of reduced purchases by stave plants. Production has edged up, but area mills are having no difficulty shipping developing green supplies. Reported prices for #1C&Btr are steady and hold the listings in check. On the other hand, demand for #2A&3A is weak, and prices are declining. The 4/4 #2A&3A listings are decreased. Sales companies report solid markets for kiln dried White Oak, but slightly more is available to buyers amid slower demand. Transactions show sufficiently lower pricing to reduce the 5/4 Fas listings.

POPLAR

Green Poplar production remains controlled alongside decent demand, especially for #1C&Btr. Reported prices lift the 4/4 through 8/4 #1C&Btr listings. Domestic and international markets are not as good now as earlier this year, though kiln dried inventories are low. The 4/4 Fas listings and 5/4 Fas figures are increased.

FRAMESTOCK, CANTS, TIES, & BOARD ROAD

Activity for Oak and Mixed Species framestock was limited this week. Inventories are elevated relative to demand, but transactions point out few changes to pricing.

A consistent theme from pallet manufacturers is that business is not great but is steady. The abundance of recycled pallets and its effect on new pallet sales continue to dominate discussions with secondary manufacturers. Most end users have adequate cant supplies but are purchasing decent volumes. No changes are warranted to the cant listing or range.

Tie inventories are high, and some buyers are working to slow receipts in order to better align on hand supplies to needs. To this point, reported prices are stable.

Because of weak low grade Oak markets, some sawmill operators have either added to board road production or have ventured into this marketplace. The additional supplies are being absorbed without impacting reported prices.

Appalachian Comments

Comments from 12/20/2024

To all our subscribers, contacts, and other industry friends – We appreciate you. We wish you the best of the holiday season, a new year of health and success, and the time to enjoy them all!

Green and kiln dried hardwood lumber shipments slowed during the last full workweek before the Christmas and New Year’s holidays. Secondary manufacturers are taking more downtime, on average, this holiday season than in a typical year, because of lackluster finished goods sales. However, a number of end users – buoyed by growing optimism among their customers – expect business to be much improved in 2025.

ASH

Sawmill operators have decent orders for developing green Ash production from drying operations with export programs. Activity is slow in other markets but contributes to overall demand. Supply and demand are closely matched for most items. The 4/4 #1C, 5/4 #1C, and 5/4 #2A listings are reduced to reflect modestly lower pricing, though all the other listings are unchanged. Kiln dried shipments are seasonally slow due to upcoming holidays in overseas markets, including China. However, exporters report having good order files banked for post holiday delivery. All published prices remain intact except the 5/4 Fas listings, which notch gains.

BASSWOOD

Contacts report adverse market conditions for Basswood. Relatively few secondary wood products manufacturers use this species, and most that do are buying less than in the past. As such, sawmills are avoiding Basswood as possible. Lower reported prices drive decreases to the green 4/4 and 5/4 Fas&1f listings and the kiln dried 9/4 #1C&Btr listings and top sides of the ranges.

BEECH

BIRCH

CHERRY

Mills and yards in the northern tier of the region report somewhat better demand for upper grade Cherry. Apart from that, this species is not performing well in the domestic marketplace. Cherry is still among the leading US hardwood species in China, but volumes have moderated in the second half of 2024. Even so, supplies have tightened amid historically low production. The green North Central 4/4 through 8/4 Fas&1f listings advance, along with the kiln dried 6/4 and 8/4 Fas figures in both producing areas. Conversely, the green Appalachian and North Central 4/4 #2A and #3A listings lose ground.

HICKORY

End users of this species are well supplied and are either limiting purchases or not purchasing at all. Sawmills have responded by lowering log prices to discourage receipts and/or converting more Hickory into ties and other industrial products, to the extent possible. Despite these steps, supplies are still meeting or exceeding buyers’ needs, and prices remain soft. To better represent prices in observed business, the green 5/4 #1C, 4/4 #2A, and 5/4 #2A listings are reduced, as are the kiln dried 4/4 #2A listings.

HARD MAPLE

Markets for kiln dried Hard Maple are less energized than during the first eight to 10 months of the year. This is particularly true for the common grades, though all grades are now subject to downward price pressure. The listings and noted ranges retreat for 5/4 through 8/4 Fas, 4/4 #1C, and 5/4 #1C in both color classifications. Even as kiln dried Fas prices are easing, green Fas&1f prices remain firm. The #1&2 White and Unselected 6/4 and 8/4 Fas&1f listings climb in this issue; previous increases have the 4/4 and 5/4 Fas&1f figures in order. No changes are made to the green #1C, #2A, or #3A listings.

SOFT MAPLE

Demand for Soft Maple varies noticeably by grade, as has been the case for several months. The upper grades are drawing solid interest, particularly 4/4. In contrast, #1C business is mediocre, at best, and #2A activity is slower still. What is more, sellers are struggling to find consistent outlets for brown Soft Maple. Reported prices for most green and kiln dried items are grouped around the respective listings or otherwise contained within the ranges. The only exceptions are reductions to the kiln dried 6/4 Fas listings and ranges in both color classifications, along with the Sap&Btr 4/4 #2A figures.

#2&3A OAK

Truck trailer flooring plants are operating well below capacities, and residential wood flooring factories are not very busy either. Amid these business conditions, companies in both sectors are controlling lumber purchases and receipts during the last two weeks of the year. Published prices for #2A&3A Red and White Oak have declined sharply over time, though no additional reductions are warranted this week.

RED OAK

Shipments of kiln dried Red Oak are seasonally slower, which is expected in the last two weeks of the year. Drying operations have decent order files to ship in January, particularly for export. Most #1C&Btr items are selling well, though 4/4 Fas and 4/4 #1C are in the best demand. Higher reported prices lift the 4/4 #1C&Btr and 6/4 Fas listings and noted ranges. Green #1C&Btr Red Oak are moving well to concentration yards, notwithstanding some disruptions due to the upcoming holidays. Flooring plants are restricting #1C and #2A&3A purchases. All the green listings remain intact this week.

WHITE OAK

Receipts of White Oak logs have trended up at sawmills during the second half of 2024 amid reduced purchasing by stave factories. Market conditions for green and kiln dried White Oak lumber have changed as a result. Most #1C&Btr items remain in good demand but are now more readily available. Prices have a downward bias. In this issue, the green 4/4 Fas&1f and 8/4 #1C&Btr listings retreat, as do the listings and ranges for kiln dried 4/4 and 5/4 Fas. Consumption of #2A&3A White Oak by residential and truck trailer flooring manufacturers is well below historic norms. Exporters report decent #2A White Oak sales to China and Vietnam. Prices for green #2A&3A and kiln dried #2A White Oak are little changed from last week.

POPLAR

Sales contacts report favorable market conditions for this species. During the last 30 days, many sawmills had extensive production runs of green Poplar, which concentration yards and secondary manufacturers readily absorbed. Prices are firm, though repeated increases in recent weeks have all the listings in order. Drying operations have solid order files for kiln dried Poplar from domestic and export customers at prices that are well represented by the current listings and ranges.

WALNUT

Sawmills that consistently produce this species describe business for green lumber production as decent. Demand is better for #1C&Btr than for #2A. Observed prices are in wide ranges but do not require any changes to the listings this week. Sales of kiln dried Walnut are lackluster, overall, which contacts largely attribute to seasonal slowing rather than weaker underlying demand. The 4/4 Fas, 6/4 #2A&Btr, and 8/4 Fas listings and ranges decline on lower reported prices.

FRAMESTOCK, CANTS, TIES, & BOARD ROAD

Hardwood framestock shipments to upholstered furniture manufacturers were restricted this week. Manufacturers have little incentive to bring in additional loads before year end, as most have limited orders for finished goods but plenty of raw materials. Prices for Oak and Mixed Species framestock are flat in limited trading.

At least two trends are impacting hardwood consumption by the wooden pallet industry. First and foremost is the widespread preference for softwoods by end users of pallets. Second is the increased availability of recycled pallets. Because of these trends, supplies of pallet cants and lumber are easily keeping pace with demand despite historically low hardwood production. The cant listing and range remain intact following last week’s decreases.

Crosstie inventories at treating facilities are at multi-year highs, according to the Railway Tie Association. While some newly booked orders for 7x9 crossties are priced $0.50 to $1.00 below previous levels, almost all observed transactions are within the two sub-regional ranges, which are, therefore, unchanged.

More than 80% of Appalachian area producers report slow demand for board road. Prices are little changed from the last few weeks, allowing the listing and range to stand.

Northern Comments

GENERAL

Comments from 12/20/2024

To all our subscribers, contacts, and other industry friends – We appreciate you. We wish you the best of the holiday season, a new year of health and success, and the time to enjoy them all!

Low demand has led to historically low sawmill production of Eastern US hardwoods. Output has contracted in the Northern region, as well as the Appalachian and Southern regions. It is because of contracted sawmill production that supplies are not overwhelming the market’s needs and why supplies of certain items are tight. Operating reduced production schedules is not a long term solution to a diminished marketplace, which raises concerns about sawmill capacity going forward. Nonetheless, market sectors are purchasing the items in quantities needed for near term objectives despite the potential for future supply disruptions. Controlled purchasing is not necessarily aligned with controlled sawmill production. Ash, Soft Maple, Red Oak, and White Oak are frequently listed as top selling species. However, the upper grades are far outperforming the common grades for these and most all species. Industrial lumber and timber markets have held up reasonably well; sawmill production of pallet material, ties, and board road is ample to excessive of buyers’ needs. More details are in the following comments.

ASH

Exports of kiln dried Ash lumber held up well this fall. Domestic business is limited but is an important contribution to overall demand. At the same time, contracted sawmill production of Ash has tightened green lumber availability, which has since lowered kiln dried supplies. The listings for green 4/4, 6/4, and 8/4 Fas&Sel notch gains this week, along with the green 5/4 through 8/4 #1C figures. Information also advances the kiln dried 4/4 Fas listings and high ends of the ranges.

ASPEN

Sawmills have restricted production of this species, which has allowed inventories to decrease over time. Supplies are closer in balance with demand than they would be otherwise, but they are not fully aligned. Sales contacts report very little market interest in green #2A and #2B, with observed prices pushing down the listings this week. No changes are warranted to the #1C&Btr grades. Downward adjustments are made to all published grades of kiln dried Aspen, including the listings and ranges for 4/4 #1C and the high ends of the ranges for 4/4 Fas and #2A.

BASSWOOD

This species has spent the year ranked as one of the worst-selling items in Hardwood Market Report’s business performance surveys. Decreased consumer spending on interior furnishings and fittings along with increased competition from engineered wood and non wood materials are contributing factors to the reduced use of Basswood. Efforts made by sawmills and concentration yards to limit production of this species have cut supplies, which have helped mitigate downward price pressures. Reported prices for green and kiln dried Basswood are consistent with last week, requiring no changes to the listings or ranges.

BEECH

BIRCH

Mills and yards have successfully managed production of this species to limit excess supplies while staying engaged with customers’ needs for Birch. Market competition from Hard and Soft Maple has cut into demand for this species, to an extent, but demand from end use markets is off. The upper grades of Birch are performing better for sellers than the common grades, and off color or brown stocks are very difficult to move. Regardless of market preferences, all grades are facing competitive pressures in the marketplace. At present, activity in process for green Birch is reportedly priced in line with the respective #3A&Btr listings. Not much price movement is seen for kiln dried Birch, either, though information warrants reductions to the 4/4 Fas listings.

NORTHERN SOFT GREY ELM

HARD MAPLE

Production of this species remained high throughout summer and most of this year because Hard Maple had been one of the best selling species. Sawmill production has since changed to incorporate more Red Oak, Ash, and White Oak, as they are available – also because these species are salable, and Hard Maple supplies are somewhat elevated. Winter production of Hard Maple will soon begin to ramp up, which may be another short term challenge to Hard Maple business; some buyers may be delaying purchases, and some sales operations may be pressing to clear out inventory ahead of new winter sawn lumber. As has been the case, the upper grades are considered better sellers than the common grades, but no grade is immune to competitive pressures. Information takes down the kiln dried 4/4 and 5/4 listings and ranges along with the 4/4 #1C and #2A figures in both color classifications. There is less price movement in reported activity for green Hard Maple. The only necessary changes this week are reductions to the #1&2 White 4/4 #2A and Unselected 4/4 #2A and #3A listings.

SOFT MAPLE

Much like Hard Maple and many other hardwood species, demand for Soft Maple comes down to dryness, thickness, grade, and color. Market interest in the upper grades and good color Soft Maple is high, while demand for the lower grades and brown color is markedly low. The imbalances are evident in reported prices. Increases are warranted to the green 4/4 through 8/4 Fas&Sel listings in both color classifications. In contrast, the listings are reduced for green Sap&Btr 4/4 through 8/4 #1C and #2A, as well as for Unselected #1C, #2A, and #2B. Kiln dried prices are still pressured, but the Sap&Btr and Unselected figures remain in order.

RED OAK

While demand for the upper grades is solid, demand for the lower grades is far less robust. Specifically, decreased demand from the truck trailer and residential flooring sectors has slowed business and pressured prices for #2A and #3A Red Oak. Still, there was no meaningful price movement reported for green Red Oak this week, which holds the listings steady. Reported prices for most kiln dried items also held pat, with increases to the low ends of the 6/4 Fas ranges being the only adjustments.

WHITE OAK

Although there is less White Oak growing in the North than in other regions, demand remains solid for #1C&Btr developing from this region. However, the same cannot be said for #2A and #3A because business has been off from the primary market sectors for these items. This week, observed prices for all grades of green and kiln dried White Oak were little changed and remained in line with the respective listings and ranges.

PALLET LUMBER, CANTS, TIES, & BOARD ROAD

Some reports state that cants and pallet lumber are moving well for specific lengths, but mills indicate they are generally able to move developing production. It is no small reason that supplies are not overwhelming demand; sawmill production has been and remains historically low. Reported prices for pallet lumber and cants are mostly unchanged and leave the listings and ranges intact.

Tie demand is reported to be slowing down as the end of the year approaches. Inventories are elevated, and buyers are moving to tighten purchases. Still, no changes are necessary to the published figures.

Board road markets have been slow for most of the year, though supplies have contracted alongside lower demand, allowing the listing and range to remain unchanged.

Oak Strip Flooring Comments

General

Comments from 12/20/2024

Activity reported for Oak strip flooring was consistent with previous weeks. The nature of business was routine, which might be a better outcome than some had expected for the last full workweek of the year. Distributors are purchasing to replace supplies of items needed most, and then fill out loads with staple items that regularly rotate out of inventory.

Manufacturers are capable of shipping most grades of Red and White Oak strip flooring promptly and are happy to accommodate customers’ requests for rapid order fulfillments. What manufacturers are not doing is chasing business with price incentives to close out this year. Price fluctuations seen this week were moderate in terms of both frequency and amounts, requiring no changes to any of the listings or ranges. However, there is no mistaking that business is competitive; buyers are price aware, if not price sensitive.

One major consideration for Oak strip flooring business next year is the US housing market. With building material prices well off historical highs stemming from COVID, will new home prices decline? If not, why? Lumber and other forest products shouldered the blame for skyrocketed home prices in 2021; lumber prices have not been an excuse for well more than a year. If new home prices do subside, will buyers spend to upgrade interior fittings and opt for wood flooring?

Remodeling is a larger factor for Oak strip flooring demand than new housing construction. Even though single family housing construction expenditures are greater for new units than for remodeling ($423.9B Vs $384.8B, October 2024, SAAR), remodeling dollars are heavily concentrated on lifestyle enhancements to the interior of the home. It is uncertain how much is left in this historic run on remodeling. However, there currently is no financial incentive for existing homeowners to scrap low interest rate mortgages to purchase new, higher priced houses.

If there is increased demand for Oak strip flooring in 2025, manufacturers are capable of supplying additional finished goods so long as the lumber production infrastructure is intact. The question about logging, sawmill capacity, and lumber supplies will loom larger when the truck trailer flooring sector reengages the lumber market next year, as expected.

International Comments

GENERAL

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