Expanding residential flooring sales in North America and exploding Chinese consumer demand for American oak in flooring and other furnishings will drive additional red oak price increases over the next two months.
Improving U.S. markets for cabinets, stairs, moulding and millwork will also give red oak a lift, as will brisk shipments to Mexico. With demand growing across such a broad spectrum of markets, virtually every red oak item will move easily. In fact, red oak sales will be limited more by relatively low production and slow winter kiln turns than by demand.
Barring a sudden, unexpected turnaround in economic conditions, European markets for white oak won’t break out of the doldrums for at least another six months. Shipments to Europe won’t decline much from current levels, however, and any declines will be offset by increased shipments to fast-growing markets like Vietnam, Indonesia, Thailand and Turkey—each of which imported at least 45% more U.S. white oak in 2012 than 2011.
Importantly, we also expect rising prices and tight supplies of red oak to bolster white oak demand in China, the largest foreign market. In North America, sales of 4/4 #2&3A Common white oak will remain strong to residential flooring plants.
Have something to say? Share your thoughts with us in the comments below.