AD TEST UPDATE
Nearly two-thirds of sawmill operators surveyed this week describe green lumber sales as slow. Similarly, a majority of sales contacts reported slow kiln dried lumber sales. Not a single seller described green or kiln dried business as good or strong. For the vast majority of green and kiln dried grade lumber items, supplies are elevated and prices are wobbly. Even so, there are a few bright spots in the broader marketplace. Demand for crossties is quite good, and pallet cants and lumber are still moving well, even though many pallet plants are filling up. Canadian and Mexican markets are turning in decent performances, even if European and Southeast Asian markets are not.
ASH: Demand for this species has cooled off the last couple of months. Domestic end users and distributors are well stocked with Ash and purchasing on a replacement basis. Activity in the key RV furnishings sector is lethargic. Exports are equally slow to Southeast Asia and much of Europe. Kiln dried prices are trending down, though the published figures require only a few adjustments at this time. The 4/4 Fas, 5/4 #1C, and 4/4 #2A listings and noted ranges decline. Last week’s across the board decreases have many of the green listings in order, but reductions are necessary for 4/4 #1C&Btr (-$35), 4/4 #2A (-$25), and 6/4 through 8/4 #1C and #2A (-$25).
BASSWOOD: Markets for Basswood are losing momentum in the US and they remain quiet abroad. Contacts cite three primary causes for the slowdown. First, construction on many new homes has stalled before reaching the stages when hardwood fittings are put in. Second, prices are now substantially lower for Poplar and other woods for which Basswood can substitute. Finally, an influx of imported wood, composite, and non-wood products is eroding Basswood’s share in certain end use markets. The species is salable, but prices are coming down, at least for kiln dried stocks. The 4/4 Fas figures move lower in this issue, with changes for other items contained within the ranges. The green listings remain in place, for now.
CHERRY: In assessing Cherry business, sales contact have little good to say. Domestic markets for this species have been mired in a deep slump for a long time, and the situation has worsened of late. Plus, demand is anemic in almost every Asian and European country. However, for volume sales, China is an exception and is the lone bright spot among large markets. Kiln dried prices are yielding to competitive pressures. The listings and ranges are lowered for all items except Appalachian 6/4 through 8/4 #1C and North Central 5/4 through 8/4 #1C. Green prices are broadly retreating, though previous decreases have the North Central listings in order. But, the Appalachian 4/4 through 8/4 #1C&Btr listings fall back this week, with Fas&1f off $25 and #1C down $15.
HICKORY: According to green sawmill operators, less effort is required to move this species than most others. Even so, customers have become more price sensitive now that most have ample on hand supplies. This is true for flooring plants, other secondary manufacturers, and concentration yards. The 4/4 through 8/4 #2B&Btr listings decline $25. Domestic demand for kiln dried Hickory is only fair, and exports are slower than they have been in several years. Prices are responding, necessitating reductions to the 4/4 #2A&Btr listings and ranges.
HARD MAPLE: Comments about current market conditions for Hard Maple are unfavorable. Supply pushed ahead of demand several months ago. And, the supply/demand gap has widened further the last 30 days amid persistently high production and somewhat lower usage by cabinet plants, residential flooring plants, and other markets. Through July, year to date US exports of Hard Maple lumber were up 21% to Canada, down 1% to China, up 15% to Mexico, and up 15% overall. However, exporters indicate shipments to several markets have since slowed. Prices in observed and reported transactions are trending lower. The green #1&2 White 4/4 through 8/4 #1C&Btr listings drop $80 for Fas&1f and $30 for #1C, with the equivalent Unselected items down $80 for Fas&1f and $60 for #1C. In addition, the Unselected 4/4 and 5/4 #2A and #3A listings fall $10. For both color classifications, all the kiln dried figures retreat except for 8/4 Fas.
SOFT MAPLE: Sawmills and downstream sales operations are struggling to generate orders for this species. Kiln dried inventories are elevated, and prices are dropping, leaving buyers little incentive to purchase more than what is needed for immediate use. There is ongoing business, but at reduced prices. All the Sap&Btr and Unselected listings and most range numbers warrant reductions in this issue. Even though temperatures are moderating in much of the region, green Soft Maple must be processed and shipped quickly to avoid stain damage. That is proving difficult in the current market environment. However, sellers are moving full production when showing flexibility with pricing. To better reflect reported prices, the Sap&Btr 4/4 through 8/4 #2A&Btr listings are lowered $40 for #1C&Btr and $30 for #2A; the Unselected 4/4 through 8/4 #1C&Btr figures are decreased $40 for Fas&1f and $30 for #1C; and the Unselected 4/4 #2A listing falls $15.
#2A&3A OAK: Residential and truck trailer flooring producers are almost universally satisfied with current lumber inventories. In fact, many would prefer to have less Oak lumber on hand. However, for the first time in months, some are expressing concern about potential supply contractions in late 2022 or Q1 2023. For now, plants remain conservative with #2A&3A Oak purchases – especially Red Oak – and are seeking additional price reductions. With #2A&3A Oak priced well below pallet cants and crossties, reductions are smaller than in past weeks. Published prices for all thicknesses of #2A&3A Red Oak and White Oak drop $10.
RED OAK: Markets for green and kiln dried Red Oak are unsettled. Most of the outlets sellers usually depend on for Red Oak sales are quiet, including the residential flooring industry, the distribution yard sector, and China. Supplies are high despite efforts by sawmills and drying operations to curtail production and purchasing. Most of the green listings fall back, including 4/4 Fas&1f (-$35); 5/4 Fas&1f (-$15); 4/4 #1C (-$25); 4/4 through 8/4 #2A&3A (-$10); and 4/4 #2A Alone (-$10). Meanwhile, the kiln dried figures retreat for all items except 6/4 and 8/4 Fas.
WHITE OAK: Demand for this species continues to contract domestically and internationally. High inventories and challenging economic circumstances are limiting kiln dried White Oak purchases by customers in Europe, Southeast Asia, and North America. Pricing information is highly varied, especially for 4/4 Fas White Oak. The listings and ranges are lowered almost across the board, with only 6/4 #2A unchanged. Sawmills are contending with rapidly declining green prices that are making it almost impossible to profitably saw White Oak logs. Reported information subtracts $150 from 4/4, 6/4, and 8/4 Fas&1f; $100 from 5/4 Fas&1f; $50 from all thicknesses of #1C; and $10 from 4/4 through 6/4 #2A&3A.
POPLAR: Market conditions for this species are not very favorable even though domestic business is decent. Exports are an important component of overall Poplar demand, and they are slow. What is more, mills have not slowed Poplar production much, if at all, because it is easier to move than many other species. All of these circumstances have created a dynamic pricing environment. The green 4/4 through 16/4 #1C&Btr listings are reduced $30 for Fas&1f and $20 for #1C, and the kiln dried figures fall back for every thickness/grade combination except 5/4 #1C and 8/4 #1C.
WALNUT: This week brought little meaningful change in the direction of Walnut business. Sales of kiln dried stocks are holding up better in North America than overseas. Even so, weaker exports are weighing heavily on overall demand and are contributing to ongoing imbalances between supply and demand. To better reflect observed prices, the 4/4 #2A&Btr, 5/4 #1C&Btr, and 8/4 #2A&Btr listings and noted ranges are lowered, as are the low sides of the 5/4 #2A ranges. Green prices also remain under pressure, as evidence by decreases to all the published numbers this week. The listings fall $50 for 4/4, 6/4, and 8/4 Fas&1f; $75 for 5/4 Fas&1f; $75 for 4/4 and 5/4 #1C; $50 for 6/4 and 8/4 #1C; and $35 for 4/4 through 8/4 #2A.
FRAMESTOCK, CANTS, TIES, & BOARD ROAD: Upholstered furniture manufacturers describe business as sluggish and framestock inventories as more than adequate. As such, solid hardwood framestock is moving slowly, according to most sales contacts. Prices are trending lower, necessitating $15 reductions to both ends of the Oak and Mixed Species ranges.
Wood pallet plants in most sections of the Appalachian region have plenty of pallet cants and lumber but are being offered still more. Cant prices are showing a pronounced downward bias, but last week’s reductions have the listing and range in order.
In surveys this week, more sawmills mentioned crossties as a bestselling item than any other grade lumber or industrial product. In addition to strong demand, higher pricing compared to many grade lumber items is motivating mills to cut more crossties. Most reported 7×9 crosstie prices are grouped within the respective ranges.
Board road business usually slows in the fall, and this year is no exception. Fewer projects are available, and most are going to longtime board road suppliers. The listing and range hold steady.