National Hardwood Magazine - July 2012

Supplier news about

Supplier news about sales, labor, prices, trends, expansions and inventories. SOUTHEAST LAKE STATES WEST COAST Hardwood suppliers and end users in the Southeast are limiting their purchases to replacement only. “Most of our buying now will be limited to items needing replacement until October when we’ll begin another seasonal cycle,” a source in Mississippi said. “Quality is the primary target and request for our customers and their customers,” he continued. “What we’re seeing is that price is important but quality overrides that. In other words, people will pay more for a consistent, quality product.” When asked about transportation issues he noted, “We are finding transportation to be a slight challenge because of the added fuel charges earlier this year. That goes for both container and truckload shipping. Availability of trucks and containers is not an issue.” Supplying Hardwood lumber in the distribution network, the contact said his customers’ businesses ap- Hardwood suppliers in the Lake States report improvements in business activity. A source in Wisconsin indicated the improved conditions are a direct result of an increase in demand for finished Hardwood products. “Our flooring and millwork customers are increasing their orders as their customers are finishing projects or starting new ones.” The supplier did indicate that inventories are suffering as a result of the unexpected recent spike in demand. “We don’t know how long it will last, but we weren’t expecting this much of an improvement,” he said. “We don’t keep a large inventory on hand like we used to. We’ve been on the just-intime scale for quite some time. As a result of not being prepared, our inventory has taken a hit.” A source in Michigan said, “Business is sketchy right now, only because some people are swamped and some are very slow. There is no Please turn to page 41 Please turn to page 50 On the West Coast Hardwood suppliers are a mixed group. “It’s still a very fragmented market in Southern California,” one supplier commented. “We’re not exactly mirroring the national trends. For example, Poplar is the hottest specie on the market yet there’s a lot of it in Southern California right now.” As for pricing the source explained, “It’s been inching up price-wise, but we have not missed any orders by being unable to find material. Walnut has been in a price free-fall across the board and nationally.” According to another contact, some mills are successfully holding the line price-wise and waiting it out. “Our business has been going so well that I’m paranoid. I feel like a squirrelly little criminal that’s going to get caught soon. We bid a Walnut project a couple of weeks ago and received a vast range of mill quotes from ‘tell us where we need to be’ to numbers in line Please turn to page 51 NORTHEAST Hardwood suppliers throughout the northeast region factored in a mild winter early on in 2012 for increased logging activity. “We’ve had decent sales activity since the beginning of the year,” a contact in New York explained. “Log prices have been good and dry weather has improved logging. All of these factors have contributed to an improved market for our region.” However, the source did indicate a change in availability of green lumber specific to whitewoods. “Whitewoods are limited in supply,” he said. “But we are seeing an improvement in the near future because green lumber is moving into the marketplace.” Specifically he noted developing production of Ash is beginning to firm prices. “Activity for green No. 2 A and Better Ash has improved but buyers are tightening up on their purchases. Log availability has allowed us to Please turn to page 52 6 Hardwoods...A Renewable Resource

QUEBEC Industry contacts report that availability of sawmilled production is consistent. Grade lumber and timber products are sufficient overall, but not overwhelming. Even though flooring product demand is somewhat steady, green lumber availability is only slightly more than adequate. The market is deemed as very competitive and highly controlled at this time. As in Ontario, building green inventories and kiln dried stocks are for short term use. The supply is meeting the market’s demand for most species and grades. Domestic markets for Ash are reported as robust and export markets are also faring well. Birch demand remains steady, with demand keeping close pace with kiln dried and green production. The regionally important species Hard Maple is seeing continued demand. With the decreased summer production it is helping to keep prices up, remaining firm for green 4/4 and 5/4 No. 1 and 2 White, No. 2A and Better and Unselected No. 1C and Better. Prices are reported as mixed. There is limited interest in thicker stocks for this species. Strong demand for Soft Maple has boosted market activity for this species. The summer decrease of production of this species and the current supply strains are keeping prices in a higher trend. Exports of White Oak are down due to economic strains in the EU. Demand for Hardwoods and Hardwood products is down, as well as for other goods and services. Export business is seen as more competitive, and prices are responding where there is pressure. According to the Forest Products Association of Canada (FPAC), Canada’s forestry industry expects to add 60,000 News from suppliers about prices, trends, sales and inventories. ONTARIO The slight improvement in the U.S. economy and housing industry is good news for Canadian Hardwood producers. Exports overseas are also reported to be improving. However, caution is being exercised in daily operations. Many purchase for short term needs, and suppliers comment they don’t want to build inventories for what is seen as an uncertain future. Supply and demand is seen to be on an even balance. Activity for most species is reported to be at a steady pace but conditions are competitive. Production of Ash is moving in markets, and exports of this species are reported to be going well. Demand for green stock Birch is keeping pace with production, with prices being firm for unselected No. 3A and Better grades. There is some competition from Maple with this species for color sorted material. Sales of Aspen are based on established buyer-seller agreements, providing stability in volumes ordered and shipped thus keeping prices stable. There is solid market interest for Hard Maple, the regionally important species, and especially for certain thicknesses. Sawmillers and wholesalers are saying that demand is keeping pace with production. Soft Maple business is also doing well, with orders and shipments keeping supplies stretched thin as there is no inventory backlog accumulating for future use. There is less of a demand for thicker stocks. White Oak exports to the EU has increased over the past two years, mainly shipped from the U.S., China, Canada and Vietnam. The international demand and domestic markets are reported as firm. With the seasonal transition of logging and sawmill production of whitewoods that took place in the spring, Please turn to page 52 Please turn to page 53 JULY/2012 7