U.S. hardwood lumber exports to Asia were down 10% on the year through June. However, more than half of exporters reported improving sales to China in August, a marked turnaround from the steadily falling demand of the past year.
Hardwood lumber sales remained relatively slow, as a combination of lackluster overseas demand and the easy availability of lumber kept many buyers on the sidelines. Abrupt lumber price declines challenge profitability, while the ultimate impact of China devaluation is a wild card.
While U.S. hardwood exports lagged in May and June 2015, domestic demand for hardwood lumber continued to improve. Home construction, which dipped in May, was set to move higher, as both permitting and builder confidence rose - which played out as expected when June figures surged. New and existing home sales also expanded, driving better demand for cabinets, moulding and millwork.
U.S. hardwood lumber exports through April trailed the 2014 pace by 7%. With global inventories still on the high side, most buyers will take only what they need through the summer. Until the market finds its bottom this fall, buyers will only bite on larger blocks at deep discounts.