National Hardwood Magazine - February 2021

News from suppliers

News from suppliers CANADIAN TRENDS about prices, trends, sales and inventories ONTARIO QUEBEC As we move away from the Christmas and New Year’s holidays, some contacts reported business picked up during the early part of the year. With U.S. residential construction expenditures being at their highest for a third consecutive month, exceeding 0B (US), the highest rate in 14 years, according to the U.S. Census Bureau October statistics, this has been a strong driver for demand of Hardwood finished goods. The most recent data available in October noted that total private residential spending topped the previous year by 14.5 percent to 7B. This is due in part to inventories of new and existing homes being extremely low, with homeowners opting to upgrade their homes because of limited new and existing homes for sale. This has provided some respite for Ontario and Quebec Hardwood producers and secondary manufacturers of moulding, flooring and cabinets, and other products, as sales to the U.S. improved slightly for them. With the demand comes the struggle to ramp up mill output, and tighter supply chains as the country is still going through the second wave of COVID-19. Companies are still experiencing difficulty in finding qualified workers in the forestry and Hardwood sectors. This has also resulted in prices rising higher for a number of species, grades and thicknesses. Canadian residential renovation has also risen due to COVID-19 pandemic as people stayed home and focused on renovation projects. The housing market is seeing a very active resale market, especially in Ontario and Quebec, where there was a bidding war on sales of homes One contact commented that business for them is very strong, both for domestic and export markets, with supplies being tight. They need more logs at the mill, and the cold winter weather that hit in late December and early January was just what was needed to improve that situation. Other contacts noted that demand from the U.S. had been sufficient to keep inventories low and prices pressured. Going through the holiday period, some contacts stated demand remained steady for most species and it didn’t look like markets were going to slow down. It was felt that the pent up demand for housing in both Canada and the U.S. would likely keep new home construction strong in 2021. Basswood sales are good due to improved home construction and renovation. The kiln-dried inventories that had accumulated have now been worked down. Now, tight supplies and demand are driving price inflation. Sawmills are shipping total green production, but interest is better for upper grades than for the Common grades. Contacts note that demand for Ash is mixed. The FAS demand is very good, followed by No. 1 Common. A few contacts noted interest in No. 2A is lagging other grades. With the limited live Ash growing stocks, this has decreased the Ash log availability and the volume entering the market. The shortages as well as the slight increase in demand are causing prices to firm. The shortage of Birch has been a key factor for improved sales. There has been a limited availability of Birch along with Hard and Soft Maple output which pushed end Please turn to page 48 Please turn to page 51 8 FEBRUARY 2021 n NATIONAL HARDWOOD MAGAZINE FEBRUARY 2021 n NATIONAL HARDWOOD MAGAZINE 9