Panels & Furniture Asia September/October 2022

MARKET REPORT
have otherwise. Neither of these
developments was foreseen, but each
one held back the recovery in eastern US
hardwood sawmill production.
But life and the world around us do
not remain still. Here is where business
conditions now stand:
25000000
23000000
21000000
19000000
Eastern US Hardwood Sawmill Production
(Annual Rate in Cubic Meters)
2018: 19,311,863 M3 2019: 17,922,972 M3
2020: 13,332,351 M3 2021: 15,930,181 M3
Annual rate of produciton for Jan.
thru June 2022 was 17,033,249 M3
Efforts to increase US hardwood sawmill
production have been successful, even
though the recovery is not complete.
Also, rapid and substantial increases in
raw material prices and transportation
costs have slowed or altered business in
downstream markets.
Supplies of other forest products
materials have also improved. The
effect is greater competition in the
marketplace for US hardwoods, as
well as competition for inventory
investments. Inventory investments
are higher and so are costs for carrying
inventory. Furthermore, at this time of
the year, business is traditionally slower
in summer than during the fall and
spring.
China’s economy and its ability to
produce are important. Also critical to
China’s level of activity is its ability to
ship and receive goods fluidly through
its transportation networks. Although
China’s rank as a foreign market
destination for US hardwoods has
retreated from a 54% share in 2017 to
34% year-to-date in 2022, it is still the
largest export market for US hardwood
lumber. Furthermore, China accounts for
56% of all US exports of red oak lumber
and 90% of cherry.
Cubic Meters
17000000
15000000
13000000
11000000
9000000
30000000
28000000
26000000
24000000
22000000
20000000
18000000
16000000
14000000
12000000
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Broadly, there has been a slowdown in
market activity for US grade hardwood
lumber. And inventories are backing
up inside the supply stream. Prices
that reached record highs not so many
months ago are lowering.
©2022 HMR
May 2020: Historically low annual
rate of production of 10,189,690 M3
Consumption of Hardwood Lumber by Major US Major Market
and Total Supply of Hardwood Lumber
Consumption
©2022 HMR
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total Supply
* Annualized thru June
2015
2016
2017
2018
2019
2020
2021
*2022
is ample for today’s needs — may need
to increase to meet future demand. The
good news is US hardwood sawmill
manufacturing capacity is in place to do
so. The only thing missing is a push from
the marketplace. P
Eastern US hardwood
sawmill production
historically accounts
for about 95% of all
hardwood lumber
supply available to US
hardwood markets
Major US markets
for hardwood lumber
include all domestic
and export markets
for grade lumber,
industrial lumber,
and industrial heart
dimension products.
Total supply includes
eastern US hardwood
sawmill production,
western US
hardwood sawmill
production, and
imports of hardwood
lumber
Additionally, inflation is at a 40-year
high for the US economy, along with
higher costs for borrowed money. Both
are curbing business activity. On the
positive side, US consumers are still
spending, and the outlook on residential
construction remains upbeat. Even so,
competition from non-wood products
has been detrimental to hardwoods.
This is not just a US hardwood lumber
issue, but a reality facing wood products
manufacturers worldwide.
Things are transitioning. This is
another reason why businesses have
taken a step back with purchasing raw
materials. However, there is strong
belief that fundamental demand for
consumer wood products is sound
and that inflation will cool as the
global distribution of goods levels out.
Consumer activity should then increase.
With that belief, the current rate of US
hardwood sawmill production — which
Hardwood Market Report (HMR)
is the leading source of pricing
and market information for North
American hardwoods. It has
provided reliable, expert analysis
of pricing and market trends to
hardwood companies throughout
the world since 1922. Sample copies
and subscription services for HMR
and all other HMR publications are
available online at www.hmr.com.
Panels & Furniture Asia | September / October 2022 19