National Hardwood Magazine - March 2012

Modern Cross Circulation

Modern Cross Circulation Kilns • Quality Millwork 10,000,000 BF Air Dried Yard Our Mission is to create a level of trust with companies and individuals in the forest products industry by providing comprehensive product knowledge, professional service, and effective solutions to insurance issues and problems throughout the United States. CHANEY LUMBER COMPANY, INC. P.O. BOX 909 LONDON, KENTUCKY 40743-0909 PHONE (606) 864-7375 FAX: (606) 864-7355 WEBSITE: www.chaneylumber.com SALES: Jim Baker - Bryan Gentry Weʼd appreciate your inquiries when you need quality kiln dried Appalachian Hardwood lumber in the species we specialize in which are: 4/4 & 5/4 Red and White Oak; and 4/4 through 8/4 Poplar that are all in #1 Common up through the higher grades. ALSO OUR BUSINESS IS CUSTOM KILN DRYING 600,000 BF Kiln Capacity 2,500,000 BF Dry Storage 1,400,000 Air Dried Shed Capacity Experienced in Export Container Loading Whether you’re buying or selling please give us a call. LAKE STATES TRENDS - Continued from page 6 seasonal gain as the warmer weather approaches.” In Michigan, a contact said there has been a heavy decline in demand for No. 2 A 4/4 Red and White Oak. “Secondary manufacturers have cut back hours, inventories and especially raw material purchases to adjust to the market,” he explained. “We’ve had to adjust our sawmill production to a point. We are heavy to the industrial market and those markets are steady right now.” He indicated that keeping a close eye on production, and the stability of the industrial market combined, has eased supply-based pressures. Citing the weak residential construction market in the U.S., along with economic turmoil abroad and adjustments in China’s inventory repositioning, the contact said business is down from the latter months of 2011. “In our particular operation, we don’t feel the effects until we get down the road a piece,” he informed. “Kiln-dried prices for 4/4 No. 1 Common grades have steadied, but the 5/4 numbers continue to adjust, which is pushing down the No. 1 Common prices for that width,” he continued. “Green stock is off and our recent transactions indicate softer prices are ahead for 6/4 and 8/4 FAS.” The sawmill owner added that his operation had purposely entered the winter months with a limted log deck based on lumber demand forecasts. “Weather patterns in the fourth quarter and into this year have limited logging,” he said. “So we are one of any number of mills in this region that are operating on reduced working hours.” A Hardwood lumber and flooring manufacturer in Minnesota commented, “It’s really a tough situation we’re in right now. The cutbacks and other measures we’ve all taken have eased supply pressures for green lumber products, but reduced output has tightened supplies that were already marginally meeting buyers’ demand when log decks were higher.” As for pricing, the source said, “Prices for Hard and Soft Maple and Poplar have increased, but demand for 4/4 No. 2 and 3A has decreased at greater values.” Concurring with others in the region, the supplier said sales and shipments to Europe have been delayed or put on hold due to economic woes in the region. “Our exports to China are improving but we had some slow downs in that market back in the beginning of this year due to the New Year celebrations.” As for what lies ahead, the contact said he expects moderate improvement in activity in 2012. “I think we’ll see some improvement this year over 2011. But I do believe it will come in increments. I don’t expect to see one big boom in the summer months like in the old days. I think we’ll see more of a gradual increase throughout the year this time.” WEST COAST TRENDS - Continued from page 6 Insurance for the forest products industry 708 Milam Street, Suite 300 Shreveport, LA 71101-5499 (318) 221-0547 FAX (318) 424-7516 www.keithdpeterson.com 101 E. Grace Street Richmond, VA 23219-1741 (804) 643-7800 FAX (804) 643-5800 ity hasn’t translated into meaningfully higher prices yet, but we expect it to by second quarter of this year,” he continued. Supplying all domestic Hardwoods, he said Walnut is probably the softest species on the market. “Poplar is the tightest right now, and Walnut is the slowest.” When asked what’s ahead in 2012, the source indicated he expects an average year with modest growth. A contact in Oregon said overall economic activity in the region is growing at a slow pace. “Upward price pressures are still modest, but sales are up from last year.” He also said home construction demand continues to be weak. “New home sales are especially low and prices are flat.” Along with others in the region, a source in Washington said he is keeping ‘just-in-time’ inventories and has no plans of 50 Hardwoods Have Resiliency

WEST COAST TRENDS - Continued building a significant inventory in the near future. “A very small percentage of our customers are placing their orders on file again,” he explained. “When that number rises and people are back on board, then we may increase our inventory.” When asked about other issues affecting his operation, he said the rising cost of fuel and surcharges are increasing his freight rates. “Fuel costs have been steadily rising, and trucking companies are increasing rates. There are so few trucking companies that you have to adjust and accept the rates because the competition’s rates will be even higher.” Export markets are improving for the supplier as orders have increased in recent weeks. “China’s orders have returned to somewhat normal levels,” he explained. “Container shipping availability is sluggish but rates are stable.” The contact’s overall outlook for the remainder of 2012 is optimistic. “We may have some curveballs and spotty conditions along the way, but I think we’re in for a decent year.” NORTHEAST TRENDS - Continued from page 6 higher pricing relative to the supply shortage.” He also commented that pricing for 4/4 and 5/4 Hard Maple No. 2 and Better is firm. “Interest in the thicker stocks is waning due to the high costs of kiln dried stocks up to 8/4, but supplies are not in line to justify the price increases.” When asked about the months ahead the supplier said he expects winter weather to linger in certain parts of the region. “We get some of our materials further north and those areas traditionally get a heavy mix of winter weather that will stay because of the freezing temperatures.” In Connecticut a Hardwood supplier who offers all Northern Appalachian species including Red and White Oak, Hard and Soft Maple, and Poplar mentioned that his domestic and international markets are operating with low inventories. “Considering the supply shortages we are experiencing, that creates a challenging situation for us,” he said. “To be able to supply those markets that operate from a just-in-time inventory, we need a solid inventory that can replace raw materials as they are used.” He also mentioned that many operations are back to standard work schedules, which has increased the orders for green and kiln dried lumber. “We’ve seen a particular increase in Red Oak. That species has also seen some price stabilization in the last few weeks, and that plays a role in the demand,” he informed. A Massachusetts source said sawmill production of Red Oak is limited. “Our inventories are low overall. We have a greater inventory of whitewoods, such as the Maples, than other species,” he said. “Our volume of lumber production is adequate but not unwarranted with demand.” The contact also mentioned export markets as key to the overall health of the North American lumber industry. “The economic issues in Europe and the issues in China could put our industry at risk. When our own housing markets dropped, a percentage of sawmills turned to international markets. For many, those markets have provided a large contribution to their deficit. Having said that, we have seen some recent gains in those markets but they are still spotty to a degree.” Looking at the remainder of 2012, the supplier said he expects modest activity similar to 2011. We are your solution to dust, smoke, fume and vapor problems...contact us! Air Systems Mfg. OF LENOIR, INC. Turn-key Project Management Services: • Trouble-shooting • Written assessments • Technical recommendations • Conceptual and final design • Manufacturing • Custom installations • New, used and reconditioned equipment • Sales and support • On-site maintenance • In Stock–Extensive Inventory of Reconditioned Equipment • Maintenance Services Available for Filtration Equipment 2621 Hogan Drive P.O. Box 1736 • Lenoir, NC 28645 (828) 757-3500 • Fax (828) 758-5178 Check out our new website at: www.airsystemsmfg.com • Dust Collection • Air Filtration • Ventilation Systems • Custom / Standard / Reconditioned When Quality Counts... KITCHENS BROTHERS MANUFACTURING 990,000’ Dry Kiln Capacity 1,900,000’ Predryer Capacity PRODUCING LUMBER, DIMENSION, RED & WHITE OAK STRIP FLOORING, MOULDINGS AND CUT-TO-SIZE FURNITURE PARTS SAWMILLS AT: Utica - Hazlehurst, Mississippi and Monroe, Louisiana Sales Office: John Clark - Sales Manager - E-mail: jlc1102@aol.com Paul Ostlund - Sales Representative - E-mail: paulkbmc@aol.com P.O. Box 111 Hazlehurst, Miss. 39083 Tel: 601-894-2021 Fax: 601-894-1069 Web sites: www.kitchensbrothers.com or www.cherrybark.net MARCH/2012 51