Low-grade, industrial lumber products are finding relatively busy markets, providing sawmills with a measure of relief from softening demand and prices for #3A Common and better lumber in most species.
Railroads have bumped up their infrastructure spending, and many of the railroads and tie treatment plants are concerned sawmills won’t be able to provide enough crossties in the fall and beyond.
A significant contraction in the trucking industry and higher trucking costs have helped spur growth in rail and intermodal shipping, as have increases in U.S. exports. Moreover, in several cases, concrete ties that have failed less than five years after installation are being pulled out and replaced by wooden ties.
Pallet demand is only fair, but relatively low hardwood production has kept supplies of pallet cants tight and prices firm nonetheless. Sawmills that produce board road and crane mats—two hardwood products used to facilitate oil and gas exploration and drilling—are enjoying good business, and that is expected to continue as long as oil prices stay above $70-75 per barrel. Perhaps the weakest low-grade lumber item is hardwood frame stock, which furniture manufacturers use to make frames for their upholstered pieces. It isn’t moving very well.