Panels & Furniture Asia November/December 2021

MARKET REPORT
Winding up
US hardwoods
for 2021
By Judd Johnson, managing editor, Hardwood Market
Report Publications
Hardwood Market Report (HMR)
estimations of US hardwood lumber
production indicate that supply is
nearing projected total demand by the
major market sectors. The recovery
process in sawmill output took far
longer than expected based on past
performances. In comparison, it took
about six months for US sawmill
production to regain traction after
bottoming out at the end of the Great
Recession, which was, itself, a historic
event that affected economies and
commerce worldwide. But the Great
Recession was not COVID-19 (Figure 1).
Not surprisingly, the near balance in
total US hardwood lumber supply and
demand does not apply to all market
sectors, all species, or to all thickness,
grade, or species combinations. In
general, inventories have accumulated
particular items popular in the China
and Vietnam markets. The supply
increases are more a function of business
slowdowns in these markets affected by
COVID-19. The closing of ocean ports and
factories had greater impact of reducing
demand than anything US sawmills did
to increase production.
There is one other significant point to
consider about US hardwood supply
gains in H2 2021. The June through
October period is when lumber drying
conditions are seasonally optimal;
this year, lumber drying productivity
outpaced sawmill productivity.
There is no guarantee the opposite will
occur during coming winter and early
spring, because sawmill production
could contract. Log supplies are almost
always in question that time of the
year. Furthermore, there is too much
uncertainty about future outbreaks
of COVID-19 that could disrupt US
hardwood sawmill production. But there
is one thing for certain about lumber
supplies this winter: seasonally cool
temperatures and wet conditions will
slow the lumber drying process.
So the summary to date on US hardwood
lumber supply is that inventories have
improved, and sawmills are producing
more consistently now than in early
2021. Still missing is a substantial
amount of hardwood sawmill production
capacity that is committed to producing
softwoods. Despite reduced softwood
prices, there apparently is greater
financial incentive for many of these
sawmills to continue processing
softwoods and not hardwoods.
Aspen grove in fall
(Photo: JJ Shev)
There also is a matter of log supplies in
some areas. Critically low fibre and log
inventories have forced some paper and
pulp mills to take aggressive measures
to buy more material. This has taken
hardwood logs away from sawmills in two
ways: first, paper mills can pay far more
for logs than hardwood sawmills can
afford to pay; and second, logging crews
are concentrating harvests on softwoods,
as much as possible, to accommodate
paper or pulp mills and maximise logging
production efficiencies. Therefore, some
hardwood mills are processing softwoods
because those are the logs currently
available in their wood market.
14 Panels & Furniture Asia | November / December 2021