Demand for red oak should gradually expand over the next few months. In anticipation of Red Oak Demand Rises; China Likes White Oaksomewhat better business, residential flooring plants will open their gates a bit wider, cabinet manufacturers will place a few more orders, and concentration yards will add inventory.

Chinese factories and distribution yards are now absorbing a wave of red oak that arrived after Chinese New Year, but they should remain in the market for sizeable volumes, as will Mexican buyers. Although buyers will resist price increases—especially flooring plants whose finished goods prices remain under pressure—they’ll have to pay a bit more in the short-term as sawmills delay red oak cuts while they clean up white woods. Mills have plenty of red oak logs and standing timber waiting in the wings, however, so production will rise and both green and kiln-dried prices will level off by June.

White Oak
White oak inventories are low in Europe, but economic woes will hold down white oak exports to Red Oak Demand Rises; China Likes White OakEurope and to Far Eastern manufacturers that make products for that market. Even so, white oak prices are more likely to firm than soften over the next couple of months. North American concentration yards are not flush with white oak, whether in air-drying yards, kilns or warehouses, and some will nudge up green prices to get more.

Furthermore, white oak exports are growing to several secondary destinations ranging from Australia to Turkey, which will mitigate sluggish business elsewhere. Finally, Chinese domestic demand for white oak seems to be increasing, which will help both uppers and #1 Common. Domestically, white oak shipments to residential and truck trailer flooring plants should recover as their sales expand and lumber inventories dwindle.

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