Lumber prices firm despite low demand
August 16, 2011 | 9:13 am CDT
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Companies throughout the hardwood supply chain will continue to feel the effects of slow housing starts, limited commercial construction, and sluggish remodeling activity. The economic recovery will eventually pick up steam to the benefit of North American hardwood lumber producers and secondary wood products manufacturers…but probably not this summer. 

Unfortunately, most companies will have to maintain the “hunker down and ride it out” mentality a while longer.

Relatively strong exports and recent weather-related production declines have kept hardwood lumber prices firm to rising despite sub-par demand from most domestic markets. Over the next couple of months, however, this delicate balance will shift.

Shipments to Europe will be seasonally slower. Chinese markets will be quieter—possibly much quieter—as government attempts to deflate the housing bubble by raising interest rates will also curb manufacturing activity and consumer demand. Finally, hardwood lumber production is already increasing in some areas and is set to increase in others, even if only marginally. After a brief period of stability, North American hardwood supply will edge past demand by mid-summer.







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