Purchasing by cabinet, component and flooring plants will pick up slightly as their inventories thin out over the next two months.
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.
Four things to watch: Pay rates will be pressured upward, as firms add benefits, base pay rises at retailers, and White House executive orders mandate increases. With 215,000 new jobs added in July, expect more competition for workers. Also on the watch: upward pressure on lumber and panel prices by housing's recovery, and now, with the EPA plan mandating CO2 reductions, U.S. utilities could follow Europe's elad and burn CO2 neutral wood chips - competing with MDF, plywood and OSB for raw material.
Hardwood Publishing’s forward-looking price indices for key hardwood species reflect expectations of lower Red Oak, White Oak, Hard Maple and Soft Maple prices over the next 30 days.
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.
Soft maple has taken over hard maple for control of the global maple market and has driven prices for cherry down. Unfortunately, the demand for cherry has not risen.
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.
Many sawmills and concentration yards are now planning to shut down during the week of July 4th, some for the first time ever. A contact at one such yard said, “With a lot of other companies closing for a week or two, we would get buried with lumber if we have our doors open.”
May 2015 was another slow month for North American hardwood lumber exports, according to exporters and buyers in most global markets.