Our previous optimism that hardwood demand would begin to rebound and prices would stabilize by mid-October is sagging under the weight of faltering Red Oak sales, stubbornly slow housing markets, sluggish exports, and negative global economic news. It now appears the recovery will start later and be more gradual.
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Demand for grade lumber in the U.S. and Canada will remain slow through year-end, leaving export sales the best potential for new business. Shipments to China and Europe should tick up for six to eight weeks ahead of holidays in both regions, before they slow again. We remain optimistic that Chinese purchasing will grow solidly after its New Year.
Hardwood lumber production will hold steady despite price declines that would seem to necessitate a slowdown. While several high-profile mill closures have reduced production capacity, mills in most areas are taking advantage of better log supplies to run full, single-shift production.
New home starts and sales will no more react to record-low mortgage rates than existing home sales will to record affordability. Neither market has gained any traction, and, with the sharp bump in August foreclosures, recovery seems even further away. More than ever, job security and economic stability are driving home-buying activity, and they, too, seem a long way from meaningful recovery.
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4/4 #1 Common Hard Maple |
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4/4 #2 Common Hard Maple |
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Soft Maple |
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Railroad Ties |
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Red Oak |
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Yellow Birch |
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European Markets |
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U.S.-Canada Hardwood Trade |
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