Domestic and export sales remained slow in April, and hardwood business segments are showing more signs of stress - good for buyers but bad for sellers. Low grade markets in particular have too much wood, as demand slackens with the contraction in oil.
Cabinet and furniture manufacturing — key domestic markets for cherry — are growing slower than expected, or not at all, and flooring sector purchases of cherry are now very low. The excess production of both hardwoods is driving down price.
Lumber price declines have begun to stabilize, but we continue to anticipate that lumber markets will remain slow with prices under downward pressure until fall 2015. Only high end housing and vacation homes are robust.
U.S. hardwood lumber exports totaled 116 million board feet in January, virtually unchanged from the prior month but down 14% from January 2014. Year-on-year shipments to Asia and Europe were down 22% and 6%, respectively.
Although hardwood exports dipped in December 2014 and remain slow at the start of 2015, poplar, ash, walnut and hickory exports all set annual records in 2014.
U.S. hardwood exports are hurt by rising U.S. dollar, particularly in Europe. With the exception of walnut, exports of hickory, cherry and hard maple slid in some export markets last Nov.
Hardwood lumber demand is expected to slow in February 2015, according to the latest Leading Hardwood Demand Indicator (LHDI), a forecast of future demand for U.S. hardwood lumber construction, trade trends and job markets.
Poplar’s run of strong domestic and export demand will continue for the foreseeable future. Domestically, Poplar will remain one of the strongest selling species to millwork, moulding and furniture manufacturers.