In the South, 4/4 #1 Common red oak supply is starting to surpass demand, a trend that will spread to other regions and other red oak items this summer.
Red oak exports to the Far East and Mexico will be decent, and shipments to U.S. residential flooring plants will be steady, but cabinet manufacturers will continue to limit purchases, and Canadian flooring plants won’t buy much either. In the end, markets won’t be able to absorb the extra red oak supplies headed their way without some price concessions.
Outlooks for various white oak markets are highly mixed. White oak exports to Italy, Spain and Portugal, which fell a combined 25% year-on-year through April, will be quite slow before, during and after summer holidays.
At the same time, shipments to the United Kingdom and Germany, which climbed a combined 14% through April, could lose some momentum. White oak exports to Vietnam, Japan, Indonesia and Malaysia should remain strong relative to year-ago levels and Chinese demand will pick up after a slow start this year.
Production of 4/4 and 5/4 #2&3A Common white oak will probably outpace purchasing by residential and truck trailer flooring plants. Though white oak production is increasing, strong markets for quartersawn lumber and robust log purchasing by barrel staves manufacturers will keep plainsawn White Oak supplies from racing ahead of demand. White oak buyers will be able to negotiate some concessions this summer, but prices won’t collapse.
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