Hardwood Production Increasing Alongside DemandHardwood lumber production will continue to increase as summer log availability allows mills to ramp up to serve improving domestic demand and strong export markets. Export lumber shipments in Q1 were 20% ahead of last year, but there are concerns about whether that pace of growth is sustainable. Q1 shipments to China were up 41%, and China accounted for 76% of all U.S. export growth.

Meanwhile, Chinese housing sales in the first four months of the year fell 9.9%, according to China's National Bureau of Statistics, as banks tightened mortgage lending and buyers stood on the sidelines expecting developers to cut prices further. With domestic consumption now a large driver of China’s demand for hardwoods—and given heavy Q1 purchasing—we could well see a slowing in Chinese shipments in the next several months. There will be some increase in exports to Europe and other destinations, but low GDP growth and high unemployment will limit demand in Mediterranean countries.

Back at home, strong demand for industrial products will drive domestic sales. Railroads will be working to expand capacity throughout the year, and improved economic activity will keep pallet demand strong. A possible move by the White House to allow crude oil/natural gas exports would further increase demand for crane mats and board road.

Hardwood Production Increasing Alongside Demand

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