Hardwood manufacturers are looking at positive growth continuing in 2018, but they need to expect rising prices for both hardwood lumber and panel products.
According to a report from Forecon Inc., “Lumber prices for our major (by value) species have all shown heavy demand, and most have seen a consistent upward trend in price throughout 2017 and certainly coming into 2018.” Forecon Inc. is one of the oldest established professional forestry consulting firms operating in the hardwood regions of the Eastern United States.
Forecon is reporting high demand for ash lumber in the face of concerns about the emerald ash borer damaging ash timber resources. Another hardwood on the rise is black cherry, which is seeing higher demand, especially from export markets, particularly from China and other Asian countries. But there is also elevated demand in the domestic market.
There is continuing strong demand for hard maple, especially green lumber (not kiln-dried), and reports are that there has been a specific increase in demand from cabinet manufacturers. This is another case where strong export demand, especially in Asia, continues to boost the price. Soft maple is not in as much demand as hard maple, with prices actually dropping a bit in the first half of this year.
One of the steadiest and strongest species of all continues to be red oak, which has set record export levels in volume and dollars this past year, and both international and domestic are staying strong in 2018. Forecon predicts sustained high prices for oak, keeping prices high and possibly climbing even higher into the summer months.
The influence of Asian markets is nowhere more obvious than in the hardwood panel market.
After China lost the trade dispute over dumping of hardwood panel products, significant tariffs were enacted and then postponed, but industry officials report prices have jumped even without the tariffs actually in place.
“We are already getting solicitations for Chinese softwood panels as they attempt to avoid hardwood duties,” said Tyler Freres, vice president of sales for Freres Lumber in Lyons, Oregon. “Chinese structural panel imports were up 374% in 2017.”
He also noted that high laminated veneer lumber demand has affected pricing in all grades of veneer plywood products.
“There is a very good chance that prices will continue to escalate going forward unless raw material costs decrease,” he said.
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