National Hardwood Magazine - July 2011

Supplier news about sales, labor, prices, trends, expansions and inventories.
SOUTHEAST LAKE STATES WEST COAST
In recent months the
Mississippi River and its tributaries
have risen to historically high
levels. Many areas in the southeast
were affected by flooding.
Respondents in parts of the
region accounted for milder
weather conditions with heavy
rains subsiding. Some areas
reported that flooding aftermath
has created difficult logging conditions.
As a result many sawmill
operators are not able to work at
full capacity.
In Tennessee, a Hardwood supplier
noted that replenishing log
inventories continues to be a
challenge. “Our log deck was
already low and we scaled back
our hours to preserve inventory,”
he said. “While we weren’t
affected directly by the flooding,
surrounding areas that were
include some of our logging contractors.”
Because log supply shortages
have been ongoing, the source
said Red Oak lumber availability
is especially thin. “Many grades
and thicknesses of kiln-dried Oak
are in short supply. Pricing has
been pushed higher for 4/4 and
5/4 No. 1 Common because of
the limited supply.” He also said
the same was true for Ash and
other species. “Green production
of No. 2 and Better is off and our
buyers are waiting in the wings.”
A contact in Mississippi men-
Weather conditions are a primary
concern for the Lake States
region. According to sources,
many logging contractors have
been unable to complete existing
jobs or start new ones. Hardwood
sawmills who previously reported
working from limited log
decks are running at half capacity.
In Michigan a contact said his
green lumber production has
been affected, with the volume of
lumber output down considerably
in recent weeks. “Supply shortages
are actually minimal in relation
to current demand,” he
noted. “Most items have moved
closer with buyers’ needs, which
have eased price pressures.
“Our kiln dried inventory has
decreased along with many others
in our area, which is pushing
those prices higher for certain
species, grades and thicknesses,”
he continued. The source said his
sales indicate shipping total output
is easier, but admits supply
shortages rather than demand are
the cause.
“Many mills are running at less
than capacity, operating from low
log decks. Runs of any one particular
species are inefficient currently,
especially in the minor
species.”
With low inventories and limited
market interest the supplier
has concerns for the remainder of
2011. “We have had a very wet
On the West Coast, Hardwood
suppliers are a mixed group. Some
suppliers are maintaining their
inventory but not gaining in sales
activity, while others account for
better than average conditions.
One source in California said,
“Business has been off for so long,
we don’t know what to call ‘routine’
anymore.
“Economy and housing are the
primary factors in the Hardwood
market,” he continued. “Both of
them have been at historically low
levels in the past few years. We’ve
only seen modest improvement
this year and when and if they will
ever return to a ‘normal’ level is
anybody’s guess.”
The source said his Hardwood
flooring customers are staying
afloat by contracted production.
“Contract work is keeping them
‘in-the-game’ right now but mostly
they are operating at a fraction
of their capabilities.”
He also noted that while the
Hardwood flooring sector has
responded to the three-year downturn
by contraction and attrition,
he doesn’t believe it will be able to
withstand it in the years ahead.
“Early on, many companies calculated
moves to reduce size and
most replaced ideas of expanding
with survival modes,” he said.
“Everyone’s business objectives
have shifted to short-term, minimizing
overhead, offering flexibil-
NORTHEAST
According to sources in the
Northeastern region, the volume
of lumber is moving at a steady
pace. Many segments of the marketplace
are active—from resale
operations restocking inventory
for projected business, to export
yards making purchases to fill
future shipment commitments.
A Hardwood supplier in
Connecticut noted that prices
vary depending on the species,
grade and destination. “We are
seeing solid interest in green No.
2 A and Better Ash,” he said.
“Prices are steady along with
activity. More interest is also
developing in Hard and Soft
Maple, but the supply/demand
balance is making pricing difficult.
We are feeling supply shortages
in those species, resulting in
price increases, particularly in the
5/4 No. 1 Commons.
“On the other hand, we are having
a difficult time moving our
Yellow Birch, mostly due to specific
length, width and color
requirements,” he continued.
“With inclement weather derailing
logging activity in certain
areas, production has halted for
many of the eastern sawmills.
Supply pressures on Red Oak
have eased accordingly and green
No. 3A and Better pricing is
steady for that species.”
Heavy rains over much of the
area in recent months have
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6 Hardwoods...A Renewable Resource