Gilco Lumber, Inc.... - Miller Publishing Corporation

QUEBEC
The marketplace continues to be slow paced and highly competitive
for North American Hardwoods. Mills are reported to be operating
with adequate log decks to supply the current demand, though
log supplies have been generally lower than normal. At this time,
much of the green lumber production is concentrated on
Whitewoods. Buyers are still using a controlled approach on purchasing.
It is reported there is greater sales competition in kiln
dried lumber markets. Prices are unsettled for most species and
grades due to intense sales competition, along with the economic
turmoil and overall market weakness.
Contacts report that market activity is better for Hard Maple than
for most other species; although at this time business for Hard
Maple is not that great. Demand is down and buyers are controlling
purchases to specific requirements. Winter cut production in March
was in full swing, with log availability at sawmills having sufficient
supply. The volume of green Hard Maple entering the marketplace
is more than ample to fulfill buyers’ needs, which is causing
price pressure.
The sagging demand for Soft Maple is keeping the “supply component
of the inventory-to-sales ratio” high for this species.
Overall pricing for Soft Maple is trending lower. Birch’s slow market
activity has been caused by the economic turmoil and the downturn
in U.S. housing markets, just as they have for other species.
Birch has been competing with other North American species,
including Hard Maple, as well as imported species. Prices have
gone down. Prices for various grades of kiln dried Birch have also
dropped.
Sales for Basswood continue to be based on established customer/supplier
relationships, even though it is demand driven.
Purchases are for items and quantities for specific purposes. With
the winter cut production providing enhanced color characteristics
for this and other whitewoods, there is virtually no speculative buying
in anticipation of future demand.
Orders and shipments for Beech are slow. Prices moved down
during the past couple of months due to the overall business contraction
and competition from other species. Contacts report there
is limited market interest in Ash, but indicate supplies are not
excessive or problematic for sellers, with prices being stable.
News from suppliers about prices,
trends, sales and inventories.
ONTARIO
Ontario posted weight restrictions earlier this spring, and Quebec
followed suit. Several companies were reported having switched
business, going into manufacturing railroad ties instead as their
business was no longer viable.
Alder is holding its market share even though volumes have fallen
dramatically. Ash demand remains stable despite the very
volatile markets for most other species. Basswood sales to Asia
were reported as good. Although Yellow Birch sales were strong,
prices were reported to be slipping. One manufacturer stated that
widths and lengths for Yellow Birch were the selling factors with
dramatic price effects received. Another contact stated that White
Birch was the strong species showing no weakness in price and
demand.
According to the Royal Bank of Canada’s (RBC) annual homeownership
survey of 2,026 Canadians conducted recently by Ipsos
Reid, confidence appears to be seeping back into the housing market,
with young Canadians the most optimistic that now is a good
time to buy. Sixty-five percent of respondents believe it is a buyers’
market now. Of those surveyed, 9 percent said it is “very likely”
they will purchase a home or condominium in 2009 or 2010,
and another 18 percent rated the prospect of purchasing a new
home as “somewhat” likely. Additionally, almost half indicate it
makes sense to buy a home now versus waiting until next year.
Young adults and renters are most likely to spark an upsurge in
home sales, stated RBC in its survey results. Forty-eight percent of
the under-35 group said they plan to buy and 38 percent of renters
plan to become homeowners in the next two years. Although this
optimism is not reflected in the most recent sales statistics – the
volume of sales in the Toronto area, for example, was down 47 percent
year-over-year in January – RBC predicts that lower prices
will lure a growing percentage of Canadians back into the housing
market in the next two years.
A Toronto real estate agent notes that consumers do not always
follow through on their intentions – although it is encouraging that
more Canadians appear to be thinking about buying homes. RBC’s
head of home equity financing, said low mortgage rates “and favorable
housing prices are influencing home purchase intentions this
year and may be the reason why more Canadians are poised to pur-
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8 Hardwoods Have Workability