Southern Comments

GENERAL

Comments from 5/20/2022

In most of the Southern region, weather conditions have improved for logging purchased timber. More mills report adequate log decks than any month so far this year. And, production is picking up, though labor issues continue to impact operating efficiencies for the majority of primary producing companies. Too, a number of mill owners continue to process Pine rather than hardwoods. Yet, developing supplies of most hardwood species, grades, and thicknesses are satisfying buyers’ needs. In cases, output is exceeding the market’s needs for given items, such as for green #1C Poplar. On the other hand, demand for Pecan and Hickory is exceeding availability. Markets for railroad ties and pallet cants remain good.

ASH

COTTONWOOD

PECAN & HICKORY

Demand for Pecan sometimes differs from that of Hickory, but strong interest from solid wood flooring manufacturers, concentration yards, and the railroad tie industry is driving activity for both species. Reported prices continue to rise, lifting the 4/4 and 5/4 #1C and 4/4 through 6/4 #2A listings $15. Additionally all published thicknesses of #2B climb $10.

SAP GUM

SOFT MAPLE

#2A&3A OAK

Truck trailer flooring manufacturers report good order files for finished goods, but some have been unable to run plants at full capacity because of labor issues and shortages of parts necessary to produce flooring. Lumber inventories have improved, and buyers are more cautious with purchases. Demand for residential flooring is decent, but production has, at least temporarily, surpassed the market’s needs, resulting in downward price pressures for finished goods. At the same time, most manufacturers have increased raw material inventories and are adjusting low grade Oak lumber purchases. Reported prices for green #2A&3A Oak have softened, but last week’s changes have the listings in order for now.

RED OAK

Because of somewhat better log decks, many mills have increased the volume of green Red Oak produced. The marketplace is absorbing the additional volume. However, prices are being pressured, as concentration yards and secondary manufacturers reel in raw material costs. But, last week’s changes have the green #3A&Btr listings in order. Sales contacts indicate demand for kiln dried #1C&Btr Red Oak is flat domestically but better in international business. Transactions point out numbers consistent with past information, allowing the #2A&Btr figures to stand.

WHITE OAK

Area mills continue to face stiff competition for better quality logs from stave manufacturers, but most contacts state that White Oak log supplies are improving. Green lumber production is not particularly high, and demand is absorbing developing output. The green #3A&Btr figures accurately reflect prices in the marketplace. Demand for most kiln dried grades and thicknesses is keeping inventories in check, but a few items are problematic for some sales companies, including 5/4 Fas. However, information shows up and down price movement is confined to the #2A&Btr ranges.

POPLAR

Demand for upper grade Poplar is holding up well, whereas #1C markets are softer. Transactions point out sufficiently lower number to decrease the kiln dried 5/4 #1C figures, as well as the bottom sides of the 4/4 #1C ranges. Similar circumstances are noted for green stocks. Interest in Fas&1f and low grade Poplar is better than for #1C. Pricing varies accordingly, with the 4/4 through 8/4 #1C listings declining $15, and all other grades and thicknesses standing pat.

FRAMESTOCK, CANTS, TIES, & BOARD ROAD

Weather conditions are improving for drying lumber. Well air dried framestock inventories are expected to improve in the coming weeks. But, supplies are not meeting immediate needs, and prices for Oak and Mixed Species framestock are firm.

Pallet manufacturers indicate orders for finished goods remain strong. At the same time, pallet cant production has edged up the past few weeks, and there is a closer balance between supplies and demand. Reported prices are firm but consistent with previous data, allowing the listing and range to stand.

Several tie treaters in the region report slightly higher 7x9 crosstie receipts. Most area mills have more logs to process than earlier this year, which is increasing sawmill output. Reported prices for ties are firm and hold both 7x9 crosstie ranges intact.

Some board road suppliers state that interest in this item has improved to a degree but is far from robust. Mill production is satisfying buyers’ needs, and reported prices are stable.

Appalachian Comments

GENERAL

Comments from 5/20/2022

Private spending on US residential construction surged 23% in 2021 to a record $776.2 billion. Spending on repairs and remodeling also set a record, up 14% from the prior year to $265.5 billion. Total spending was up another 19% year to date through March 2022, with repairs and remodeling up 23%. Without question, inflation is contributing to strong growth in construction spending. However, the actual number of construction projects has also increased, particularly remodeling projects. In fact, remodeling is arguably driving hardwood demand more than ever before, as construction on hundreds of thousands of new homes has stalled due to supply shortages, labor constraints, and inflated material costs. In the last couple of weeks, lumber producers, resellers, distributors, and end users have expressed increased concern about business prospects in late 2022 and beyond. High inflation, the poor performance of stock markets, and other issues are weighing on confidence. For now, however, domestic and export demand for most hardwood grade lumber and industrial items is holding up well.

ASH

Business disruptions associated with COVID lockdowns in parts of China have the potential to impact overall Ash business. So far, demand from China has not appreciably slowed. In addition, interest is holding up well in the US and several other international markets. Reported prices for green Ash are grouped around the listings, with only 4/4 #2A warranting a change this week (+$15). The listings for all kiln dried items except 5/4 #2A climb, as do many of the range numbers.

BASSWOOD

CHERRY

Solid demand from the China market, coupled with improved domestic interest, is lifting business for this species out of the doldrums. Sales are not robust, but they are decent, particularly for companies with established customers in China. Business is stronger for kiln dried than for green Cherry. Pricing information varies accordingly. The North Central 4/4 listings fall $20 for Fas&1f and $15 for #1C; previous reductions have all the other figures in order. At the same time, the kiln dried 4/4 through 8/4 Fas, 4/4 #1C, and 5/4 #1C listings and noted ranges climb in both producing areas.

HICKORY

HARD MAPLE

Markets for this species were busy the second half of 2021 and gained more momentum the first four months of this year. Supplies consistently lagged behind demand. However, whitewood production has been seasonally high in this region and the North Country of late. Supply and demand for most grades and thicknesses of green Hard Maple are approaching equilibrium, and prices are leveling out for most items. The only exceptions are #1&2 White 8/4 #1C&Btr and Unselected 8/4 #3A&Btr, which notch $30 gains for #1C&Btr and $20 for #2A and #3A. Kiln dried Hard Maple supplies remain relatively lean. Somewhat higher reported prices lift the Unselected 4/4 through 8/4 #1C&Btr figures along with the #1&2 White 5/4 Fas and 4/4 through 8/4 #1C listings and noted ranges.

SOFT MAPLE

Many of the comments in the previous section on Hard Maple also apply to Soft Maple. While Soft Maple is not overabundant in the Appalachian region, availability has improved the last two weeks. Demand remains strong, particularly from the cabinet sector. Prices for most green lumber items have plateaued, at least for now. Information raises the Sap&Btr and Unselected 4/4 Fas&1f listings $25 and $20, respectively, but holds all the other listings in place. The kiln dried Unselected 4/4 through 8/4 #1C&Btr and 5/4 through 8/4 #2A listings and ranges also advance, as do the Sap&Btr 4/4 Fas, 6/4 Fas, and 5/4 through 8/4 #2A figures.

RED OAK

Kiln dried Red Oak business is decent, overall. However, markets are performing better for the common grades than for Fas, particularly in China. The 5/4 through 8/4 #1C and #2A listings and noted ranges are raised. Previous adjustments have the Fas figures in order. Sawmill production of green Red Oak lumber is meeting and, in cases, exceeding the market’s needs. Prices range from soft for Fas&1f and #1C to steady for #2A&3A. That said, only the 4/4 and 5/4 Fas&1f listings warrant reductions (-$15) at this time.

WHITE OAK

Sawmills report growing difficulty generating orders for the full run of green White Oak production while also maintaining prices. Concentration yards have become more conservative with offering prices. Lower reported prices drive reductions to the listings for 4/4 Fas&1f (-$25); 5/4 through 8/4 Fas&1f (-$50); and all thicknesses of #1C (-$15). Information on #2A&3A pricing is consistent with the listings. Notably, markets for kiln dried Fas White Oak are showing increased vitality – including Europe – which is helping to stabilize pricing. Previous reductions have all the Fas figures in order. Demand for kiln dried #1C, #2A, and #3A White Oak is quite good in several Southeast Asian countries, led by Vietnam. Prices are firm for most items, though only the 5/4 #1C listings and low end range numbers warrant increases this week.

POPLAR

Demand for this species has not appreciably changed in US and Canadian markets in recent months. Consumption remains strong across a broad range of end use sectors, especially the moulding/millwork industry. Meanwhile, sales of #1C and #2A Poplar to Vietnamese buyers have gained considerable momentum, and business is also picking up elsewhere in the Far East. While market conditions have been favorable, the volume of Poplar entering the marketplace climbed substantially the first several months of 2022, altering the balance between supply and demand. Green and kiln dried prices have moved lower during this time, though information keeps all of the published figures intact this week.

WALNUT

Some yards that consistently purchase green Walnut are temporarily off the market. Demand for kiln dried Walnut is holding up well. However, many yards have been inundated with green shipments the last two months and are either out of space or unable to grade and stack additional volumes in a timely manner. Prices continue to respond to these circumstances. The green 4/4 through 8/4 #2A&Btr listings fall $125 for Fas&1f, $65 for #1C, and $55 for #2A. As noted earlier, kiln dried sales are decent domestically and for export. The current listings and ranges accurately reflect prices in observed transactions.

FRAMESTOCK, CANTS, TIES, & BOARD ROAD

US homeowners are spending record amounts of money on remodeling. Since many buy new furniture for newly remodeled rooms, upholstered furniture sales are brisk. Manufacturers are readily purchasing raw materials to make frames, including solid hardwood. Most reported prices are little changed from previous weeks, allowing the Oak and Mixed Species framestock ranges to stand.

Pallet cant production is gradually trending up, and pallet manufacturers are welcoming the additional volumes. In much of the region, supply and demand are in balance, and upward price pressures are easing. Lower reported prices at the high end of business take down the top side of the cant range $10; the listing and bottom side of the range are unchanged.

Treating plants are in an ongoing struggle to bring 7x9 crosstie inventories up to targeted levels. Some are making progress, others are not, but nearly all are being assertive with purchasing. Prices are holding mostly steady within the respective crosstie ranges.

Several board road suppliers in the region’s northern tier describe demand as good, including more orders bound for Canada. This is in contrast to information from suppliers further to the South, for which business is still lackluster. Reported price vary accordingly but warrant no adjustments to the board road listing or range.

Northern Comments

GENERAL

Comments from 5/20/2022

As weather conditions warm, logging contractors and sawmill operators are pressured to transport and process whitewood logs before stain damage occurs. Likewise, mills, concentration yards, and secondary manufacturers must be cautious to ship and stack lumber quickly to prevent degrade from stain. This is a seasonal issue, and hardwood suppliers and end users are adept at handling whitewoods in late spring and summer. However, while many green producers operate their own trucks, those that rely on contract haulers are dealing with delays because of truck driver shortages and, therefore, delays in shipping green lumber. Furthermore, lumber is flowing steadily, as most Northern sawmills have decent winter cut log inventories that need to be sawn. Yet, demand for most green species, grades, and thicknesses remains good. In fact, some end users would like to have more lumber, especially Soft Maple, Hard Maple, Birch, Aspen, and Basswood. Kiln dried business is holding up well, too. All surveyed sales contacts rated current kiln dried activity at the highest level. But, not all species are performing at the same rate. US and Canadian demand for whitewoods is strong, while domestic and export shipments of Red Oak are flat. As with green stocks, transportation issues continue to elevate the volume of sold lumber sitting in suppliers’ warehouses. A number of vendors state that on hand supplies of sold but unshipped lumber are at record highs.

ASPEN

Ongoing business for this species has historically been confined to a relatively small number of users and producers. However, the fashion trend to painted finishes for wood products and record high prices for Hard and Soft Maple have opened Aspen to a broader marketplace. Green production has increased and is easing undersupply issues to a degree. Current data show a more stable pricing environment for #2B&Btr, allowing the listings to stand. On the other hand, kiln dried Aspen inventories remain low relative to buyers’ needs. Information raises the kiln dried 4/4 #1C&Btr listings and noted ranges.

BASSWOOD

Area mills had a decent volume of Basswood logs during winter and early spring. Most have sawn winter cut logs and are processing a steady volume of green stocks now. The flow of #2B&Btr to the marketplace is sufficient to ease price pressures. The green listings are representative of reported prices. But, not all of the green production has been transformed to a useable state. Kiln dried inventories are thin for many grades and thicknesses, demand is strong, and prices continue to rise. The 4/4 through 9/4 #1C&Btr figures are increased.

BEECH

BIRCH

Demand for green Birch is strong, and mills and resellers are having no difficulty shipping increased production. Reported prices are steady and hold the #3A&Btr listings in check. A number of end users indicate kiln dried Birch supplies are not meeting the market’s needs. Birch usage has increased alongside record high Hard and Soft Maple prices and growth in new home building and remodeling activity. While kiln dried Birch prices are also at record numbers, they are not at Maple levels. Transactions point out sufficiently higher pricing to raise the 4/4 Fas listings and ranges.

HARD MAPLE

The seasonal rise in green Hard Maple production provided some concentration yards and secondary manufacturers with as much of this species as they wanted for near term consumption. However, some end use segments need more lumber. Green pricing has settled for the upper and lower grades, but information lifts the 5/4 through 8/4 #1C listings $20 for both color designations. Not all of the green lumber sawn the past month has been processed to a useable state. Too, demand for several kiln dried items remains strong, and inventories remain low. All of the Unselected listings and ranges advance in this issue. The #1&2 White 5/4 through 8/4 Fas, 4/4 through 5/4 #1C, and 4/4 #2A figures are also increased.

SOFT MAPLE

Soft Maple continues its historic demand and price run up. Consumer preferences for whitewoods and painted finishes has been a boon for this species. Too, housing markets have performed well. Secondary manufacturers, concentration yards, and hardwood lumber distributors continue to seek out Soft Maple. Suppliers are struggling to satisfy demand. Kiln dried prices are escalating, with all of the kiln dried Unselected and Sap&Btr listings and most range figures advancing. Meanwhile, seasonally higher green output eased price pressures to a degree. Only the Unselected and Sap&Btr 4/4 Fas&Sel listings are raised this week (+$25).

RED OAK

While green Red Oak production is not extremely high in most of the Northern region, it has increased over time, with demand remaining flat. The gains in output have shifted the price bias lower for some grades and thicknesses. However, past changes have the green #3A&Btr listings in order for now. Markets for kiln dried stocks are varied. Sales to distributors are often described as flat. But, international orders have picked up the past few months. And, interest in the common grades is holding up better than for Fas. Yet, information shows price changes are within the #2A&Btr ranges, allowing the published figures to stand.

WHITE OAK

Kiln dried White Oak business is good and is keeping inventories thin for a number of grades and thicknesses. Demand from Vietnam, China, and Europe is strong, while domestic interest in White Oak is decent. Transactions point out some upward price movement for the common grades, though last week’s changes have the 4/4 #1C and #2A figures in order. Likewise, no adjustments are warranted to the kiln dried 4/4 Fas numbers. Mills and resellers are having no problem shipping the full run of green #3A&Btr, and markets for industrial products are solid. The green listings are reflective of activity.

PALLET LUMBER, CANTS, TIES, & BOARD ROAD

Sawmill operators are working to get all of the grade lumber value possible from high cost Maple logs. They have processed fewer larger timbers and more low grade lumber. Therefore, there are ample supplies of random and selected width pallet lumber available, while cants remain in short supply. Reported prices vary accordingly, though most pallet lumber and cant pricing is within the published figures, allowing the listings and ranges to stand.

Rail traffic has picked up significantly this year over last year. US Transportation Department data show the volume of intermodal shipments rose 14.0% in April 2022 over April 2021, and rail car shipments jumped 22.9% during the same period. Higher rail traffic could translate to better demand for ties. At the same time, tie inventories have declined. In the most recent RTA report, tie inventories declined 17.0% year-over-year. The railroad industry needs more ties, and treaters are pursuing additional crossties and switch ties. Reported prices for 7x9 crossties have increased over time, though current changes are confined to the published range.

Board road production is well balanced with limited demand for this item. Reported prices are stable and hold the listing and range in check.

Oak Strip Flooring Comments

General

Comments from 5/20/2022

Oak strip flooring manufacturers report increasing difficulties in moving the full run of developing production. For many, this includes 4” and 5” width products that emerge with the 2¼” and 3¼” width primary products. Having the capability to optimize lumber widths enables manufacturers to capture additional yield that is critical to controlling costs. However, there are times when the mix of products that is best for lumber yields is not the best for sales. The same thing happens at times with species of lumber, when input determines an output that is not necessarily aligned with the marketplace.

In addition to imbalances for given items, the marketplace is contending with too much total supply of Oak strip flooring. Even items that are not necessarily abundant or even readily available are experiencing downward price pulls. White Oak stands out in this regard, and especially Sel&Btr White Oak. But clearly, it is Red Oak that is most abundant, and 3¼” Sel&Btr and No. 1Com more so than the same grades in 2¼”.

Supply backlogs are fueling competitive pressures and driving prices lower. There have been some substantial reductions within the past two weeks, in particular. Information warrants decreases to the Red Oak listings and ranges for 2¼” and 3¼” Sel&Btr and 3¼” No. 1Com. The 2¼” No. 1Com Red Oak range numbers also come down. The 3¼” Sel&Btr White Oak Appalachian listing is adjusted lower, as is the high end of the range; a sharper decrease is made to the bottom side of the range. A moderate decrease is made to the Southern 2¼” No. 2Com Red Oak listing.

HMR has closely monitored progress in residential construction. Private expenditures on single family housing construction reached a record high in March, including a record amount for new units and a near record for remodeling. Nonetheless, the construction process on new units is falling further behind starts. There is a significant backlog of units yet to be completed, which represents a significant backlog of demand for hardwood flooring and other interior fittings. As for remodeling, the biggest challenge is having enough skilled labor for the work that is available. Along with delayed business, Oak strip flooring production has returned to pre-COVID levels.

International Comments

GENERAL

Comments from 4/29/22

Demand for US and Canadian hardwoods is decent in a broad range of markets, led by Mexico, Vietnam, the UK, several EU countries, and Australia. Chinese buyers have been fairly active with purchases in efforts to shore up depleted inventories, but COVID lockdowns in that country are starting to hurt business.

While export markets are performing well, overall, ongoing transportation issues are limiting order fulfillments from North America. Exporters are working with more freight forwarders to line up containers and bookings, but with little success in speeding outbound loadings. Rolled bookings are occurring frequently. Many exporters have dozens if not hundreds of loads awaiting containers, and the shipping bottleneck is pushing back on their available storage capacity, operational efficiencies, inventory replacement purchasing, and continued sales to overseas markets. Sold inventory needs to move out, and cash for the sales needs to come in.

COVID lockdowns in and around Shanghai have become a major issue. The lockdowns are disrupting operations at factories and distribution yards; delaying container deliveries from ports; and causing problems in expediting export documents. On a positive note, the Chinese government extended tariff exemptions on US hardwood logs and lumber to November 30, 2022.

Most of the widely produced North American hardwood species are selling well internationally. In the case of White Oak, demand is stronger for #1C and #2A than for Fas, though all grades are salable. In Europe, Russia’s war with Ukraine is reducing trade in European Oak and Russian woods, which is bolstering interest in North American White Oak and Red Oak. Chinese buyers are consistently ordering Fas and #1C Red Oak. Exports of Poplar to the large Vietnamese market are rebounding; Poplar business is only fair elsewhere.

Worldwide markets would welcome larger volumes of Ash, but production continues to trend down due to Emerald Ash Borer tree mortality. Walnut sales are brisk to several markets, led by China. Cherry is drawing little attention in most of the world. However, that is not the case for China, where demand for Cherry is quite good. Hard and Soft Maple exports are brisk to Canada and Mexico and fair to China, but limited to other markets.

The US exported 125.8 MMBF of hardwood lumber in February – up 13% from one year ago and the highest February volume since 2018. Exports of White Oak (+34%), Walnut (+25%), Maple (+32%), and Cherry (+23%) were much higher this February than last, offsetting declines for Red Oak (-10%) and Ash (-13%).

Hardwood log exports totaled 36.4 MMBF in February, registering a 4% year on year increase. Shipments to China increased 12% year to date through February, with shipments down 2% to all other destinations.

Lumber exports were higher to 16 of the 17 top foreign destinations this February compared to last February; Vietnam was the lone exception. Year over year increases in February were impressive to a broad range of markets, including Mexico (+36%), Japan (+52%), Thailand (+45%), and the EU27+UK (+50%).