Southern Comments

WHITE OAK

Competition for high quality White Oak logs from stave and veneer mills continues to restrict supplies available to sawmills. White Oak lumber production has been constrained as a result. Demand for most grades and thicknesses is outpacing developing green #3A&Btr supplies. Reported prices are firm and hold the listings in check. Markets for kiln dried White Oak are not as good now as earlier this year. The slight boost in availability earlier this year seems to have satisfied buyers’ needs. In Europe, competition from European Oak is pressuring prices for upper grade stocks. Reported kiln dried 4/4 Fas prices are broadly lower and warrant decreases to the 4/4 Fas listings and bottom sides of the ranges.

Oak Strip Flooring Comments

General

Comments from 10/22/2021

Prices for base raw materials used to manufacture Oak strip flooring are at record highs and have been for some time. In addition, manufacturers expanded their supply areas and took on higher grade lumber to augment receipts. Between the extra freight and higher valued supplemental lumber, raw material costs are elevated above what the published base raw material prices reflect.

Notably, manufacturers’ raw material prices and costs have settled during the past several weeks. This might imply competitive pressures have eased, and lumber supplies are improved or possibly at targeted levels. Frankly, the marketplace is conditioned to believe if momentum stops, then a change in business direction is certain. This is not the case.

Manufacturers are neither satisfied nor comfortable with their raw material supply situation. They know time is quickly moving into a seasonally slower rate of drying for green lumber and a more disruptive time for timber harvesting and log availability. Prior to this, much of the South was inundated with wet weather during spring, summer, and into early fall.

There has also been substantial hardwood sawmill production capacity diverted to softwoods – partly because of better margins over hardwoods, but in cases because softwood logs were available and hardwood logs were not. Labor shortages are a universal problem to all business types in every area of the country. The fact that hardwood sawmills and Oak strip flooring manufacturers have increased output at all is a significant accomplishment.

Lastly, there is competition for like quality materials from outside of the Oak strip flooring industry. The truck trailer flooring industry has been aggressive in the lumber market. Now, the railway tie industry is stepping up purchases, which will increase competition for green Oak lumber all the more.

In the meantime, Oak strip flooring supplies are better aligned with current order placements. Overall, prices are more stable, although reported activity included moderate increases for a few selective items. Corresponding adjustments are made to the noted listings and ranges.