Hardwood Prices Firm Despite Spring Thaw in SupplyFinally, spring-like weather has arrived in most of the Eastern hardwood producing region. The better weather will enable slight production gains, but with supply still far below demand it is unlikely that any major price reductions will occur during the next several months.

The only item that is now finding consistent price resistance is 4/4 FAS/1F Red Oak. Appalachian Kiln Dried 4/4 FAS/1F Red Oak prices have risen 52% over the last year, from $1,245 to $1,895/MBF. For the market as a whole, price increases are slowing and should stabilize near present levels into the fall.

Growing overseas demand had export shipments pacing 15% ahead of last year through February, and February shipments were a record for that month. Chinese markets will remain strong, and improving domestic and European demand will help keep supplies tight. Railroad tie shipments will rise on higher rail freight loadings and increased maintenance investment by the railroad industry, reaching record levels of 24-25 million in 2014 and 2015. That, in turn, means little raw material relief is ahead for pallet manufacturers.

Domestic flooring plants will increase lumber demand as housing activity improves, and may see some improvement in profit margins as the year progresses. However, the increasing volume of imported flooring —up 21% through Feb—will challenge domestic producers.

Have something to say? Share your thoughts with us in the comments below.