Red Oak prices have taken a beating lately, but recent market developments suggest the bottom is near.
On the export side, Chinese buyers are rapidly reentering the market; shipments to Mexico are accelerating; and Middle Eastern demand is surprisingly good. Domestically, shipments to residential and truck trailer flooring plants remain brisk, even to those buying only enough to keep up with usage.
Demand is also decent from stair and millwork producers and from cabinet manufacturers serving both the single-family and multi-family markets. Red Oak prices will soften a bit further through October, level off for 30-60 days, and then firm back up. Prices won’t return to mid-2014 peaks, but will gain back 25-30% of the last few months’ losses.
Seasonal slowing in exports relieved pressure on 4/4 and 5/4 White Oak supplies, allowing producers to catch up on orders and build inventories. With supplies less strained, 4/4 and 5/4 White Oak prices won’t change much over the next two months.
However, supply pressures on White Oak are already starting to converge that will bring higher price later on. European buyers are replenishing depleted inventories; Chinese demand is rebounding; stave and veneer producers in Europe and Asia want more logs; and log demand from domestic stave plants continues to grow.
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