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Northern Comments

GENERAL

Comments from 9/18/20

The coronavirus pandemic has drastically altered the hardwood industry. This year started with great promise. Sawmill production was high, and demand was good. US and Canadian secondary manufacturers were benefitting from year over year gains in new home construction and historically high spending on private construction. Unemployment was low, and the economy was strong. But COVID-19 halted business, or it seemed that way. In particular, demand for pallets plummeted, as US GDP fell 31.7% in Q2 2020 from Q1 2020. The wooden pallet and container industry is the largest consuming market for hardwood products. It directly relies on economic growth to drive movement of goods from producers to end users. That is just one of many examples of how end users have been impacted. Logging contractors and sawmill operators depend on steady outlets for pulpwood logs and mill residuals to operate efficiently. But, as COVID-19 sent workers from their offices to their homes, the use of white paper fell sharply. Paper plants have shuttered facilities and processing lines to align production with lower demand. This is having a direct effect on the flow of logs from woods to primary manufacturers. Area sawmills are struggling to build back log decks and green lumber production. With demand for hardwood products now regaining strength and mill output low, supply shortages are more prevalent for many species, grades, and thicknesses.

ASH

Demand for this species is still not particularly good, but Ash production has been and is low. Mills and resellers are finding outlets for developing supplies. Reported prices have stabilized. Kiln dried inventories have edged down over time, especially for Fas. Information shows competitive pricing, primarily for the common grades, but past reductions have the kiln dried #2A&Btr figures in order.

ASPEN

Aspen business generally involves buyers and sellers with longstanding relationships. Sometimes, supplies exceed demand, as they did this summer, and prices are affected. However, this species is typically a consistent seller, and prices are usually steady. Currently, production and buyers’ needs are more closely aligned, and green #2B&Btr prices are well represented by the respective listings. Likewise, information warrants no changes to the kiln dried #2A&Btr figures.

BASSWOOD

BEECH

There is regular, ongoing business for this species. But even in longstanding relationships, excess supplies can impact pricing. That is the case now. Information shows green common grade prices have declined, requiring $10 reductions to the 4/4 #1C listing and all published thicknesses of #2A and #3A. Fas&Sel prices are steady and hold the published figures in check.

BIRCH

Birch production has held up well this summer, despite total sawmill output falling. Supplies are meeting demand, which for some grades and thicknesses has improved to a degree. Reported prices for green #3A&Btr have stabilized, allowing the published figures to stand. Contacts state that kiln dried #1C and #2A inventories remain high. Transactions point out sufficiently lower numbers to reduce the kiln dried 4/4 #1C and #2A listings and bottom sides of the ranges. Upper grade business is described as steady, as are prices.

HARD MAPLE

Demand for Hard Maple has improved in recent weeks. A number of secondary manufacturers are operating at high levels and require additional green and kiln dried Hard Maple to meet their needs. Distribution yards are also adding to on hand supplies. Demand gains have stressed the supply side of business, resulting in upward price momentum, especially for 4/4 and 5/4 stocks. Information includes higher numbers that lift the listings and ranges for kiln dried #1&2 White 4/4 #1C and 5/4 Fas. Additionally, the Unselected 4/4 #1C figures advance. Summer is a slow production period for high valued whitewoods, such as Hard Maple, and mill output is struggling to keep pace with buyers’ needs. Upper grade prices continue to climb, requiring $20 boosts to the 4/4 through 8/4 Fas&Sel listings in both color classifications. Some higher numbers are reported for the common grades, but the published figures are representative of activity.

SOFT MAPLE

The rebound in new home construction and solid remodeling numbers have increased demand for hardwood flooring, cabinets, moulding/millwork, and furniture. While Soft Maple has lost some market share to other species, demand has edged up. Information shows green supplies are generally balanced with the market’s needs. Reported prices for green Unselected #2B&Btr and Sap&Btr #2A&Btr are mostly centered on the published figures. Contacts indicate kiln dried 4/4 #2A&Btr inventories are working down, though ample availability is reported for thicker stocks. Transactions point out a more stable pricing environment for kiln dried #2A&Btr.

RED OAK

Survey respondents in each hardwood producing region listed Fas Red Oak as one of their best selling items. Low sawmill output of Red Oak during the past four months combined with a bump in domestic demand reduced inventories and firmed prices. Markets for #1C and #2A are somewhat better for the majority of sales companies but not for all. Reported prices vary accordingly, though past changes have the kiln dried #2A&Btr figures in order. Mills and resellers are having no difficulty shipping total green Red Oak production. However, supplies have increased and are, generally, meeting buyers’ requirements. Information holds the green #3A&Btr listings in check.

WHITE OAK

Upper grade White Oak business is described as strong. But, most sales contacts state that the brisk pace of activity is as much supply driven as demand driven. Information lifts the green 4/4 through 6/4 Fas&Sel listings $25 and raises the kiln dried 4/4 Fas figures. Markets for the common grades are improving, working down kiln dried inventories and providing outlets for total green output. No changes are warranted to the green #1C and #2A&3A or kiln dried #1C and #2A figures.

PALLET LUMBER, CANTS, TIES, & BOARD ROAD

In March, April, and May, many sawmill operators were unable to ship total cant and pallet lumber production. Some stacked excess pallet material. Too, most wooden pallet and container manufacturers had ample raw material inventories to run steadily when business was good. During the peak of COVID-19 shutdowns, business slowed significantly. Those raw material inventories are working down, and mills and resellers are shipping more cants and pallet lumber now. Reported prices have stabilized.

A number of treaters indicate tie inventories are at optimal or slightly high levels, and purchases are for replacement needs. Transactions point out pricing in line with last week, allowing the range to stand.

Contacts who produce board road state that markets remain slow. However, there is ongoing business. Pricing information holds the listing and range in check.

Pricing Changes

NORTHERN AREA – GREEN:
BEECH  4/4 1C 440-
2A 265-
3A 225-
 5/4 2A 275-
3A 235-
 6/4 2A 300-
3A 265-
 8/4 2A 305-
3A 265-
HARD MAPLE – #1&2 WHITE  4/4 FAS 1440+
SEL 1420+
  5/4 FAS 1485+
SEL 1465+
 6/4 FAS 1570+
SEL 1550+
 8/4 FAS 1700+
SEL 1680+
HARD MAPLE – UNSELECTED  4/4 FAS 1310+
SEL 1290+
 5/4 FAS 1390+
SEL 1370+
 6/4 FAS 1445+
SEL 1425+
 8/4 FAS 1530+
SEL 1510+
WHITE OAK  4/4 FAS 1795+
SEL 1775+
 5/4 FAS 1870+
SEL 1850+
 6/4 FAS 1970+
SEL 1950+
NORTHERN AREA – KILN DRIED:
BIRCH  4/4 1C 930-
2A 605-
HARD MAPLE – #1&2 WHITE  4/4 1C 1130+
 5/4 FAS 1945+
HARD MAPLE – UNSELECTED  4/4 1C 1060+
WHITE OAK  4/4 FAS 2330+
NORTHERN AREA – KILN DRIED NET:
BIRCH  4/4 1C 1000-
2A 650-
HARD MAPLE – #1&2 WHITE  4/4 1C 1215+
 5/4 FAS 2095+
HARD MAPLE – UNSELECTED  4/4 1C 1140+
WHITE OAK  4/4 FAS 2500+