National Hardwood Magazine - September 2019

U.S.A. TRENDS Supplier

U.S.A. TRENDS Supplier news about sales, labor, prices, trends, expansions and inventories LAKE STATES NORTHEAST Lake States lumber representatives offered mixed reports as the year begins to turn toward the fall season. “The market is fantastic as far as availability,” a lumber yard in Indiana said. “There’s nothing going on here domestically, and they’re not exporting to China so there’s too much supply. Of course, prices have come down and that helps us survive better.” He also attributed the increased lumber availability to the fact that MDF and other wood alternatives have been gaining market share during the last five years. His company handles mainly Hard and Soft Maple, Red Oak, Cherry, Poplar and German Beech, mostly No. 2 Common and some No. 1 Common, all 4/4 thickness. “All of our customers in the cabinet industry are extremely busy,” the contact said. “Every one of them is expanding.” The Indiana source lamented how much the Hardwood industry is hurting financially. “There will be some radical changes if these tariffs continue, and I don’t see an end in sight,” he said. “I don’t think the world can go without Hardwoods. It’s a great product. It sprouts out of the ground; God grows it every day. We just have to do a lot better job of making the public aware. We’ve really got to keep fighting these alternative materials.” He suggested that a price reduction might steer more consumers back to Hardwoods while also increasing his company’s margins, assuming that the prices of its products stayed the same. In Michigan, the Hardwood market is “OK,” according to a sawmill contact. “Not that we’re lighting the world on fire, but it was slower six months ago,” he commented. He added that a wet spring and early summer made it tough to get logs in. His company’s largest demand is for White Oak and Soft Maple, Select and Better grades, in 4/4 and 8/4 thickness. The sawmill also cuts Red Oak, Hickory and Walnut, which it sells mainly to end users, including cabinet, flooring and millwork manufacturers. Another lumber manufacturer in Wisconsin said his market was weaker than it was six months ago. “A lot of the export products we typically would be shipping is pretty much In the Northeast region, the Hardwood market in north central Pennsylvania is reportedly soft, both domestically and in exports, according to a lumber manufacturer located there. “When you get into July and August, it’s kind of a seasonal slowdown,” the contact observed. “In regard to exports, of course, we all know what’s happening in Asia and China, and that certainly affects what we’re doing here.” His top-selling species continue to be Ash, Red and White Oak, Cherry, Hard and Soft Maple, with the grades most in demand being species specific. “All the uppers move pretty well with the exception of Hard Maple,” the source said. “We also have our own flooring plant here, so our low grade goes to the flooring plant, so that’s a non-issue for us…90 to 95 percent of what we saw is 4/4.” The company sells domestically to end users, and exports to distributors and end users. “We do sell a lot of lumber to the kitchen and bath industry, and the negative feedback we get is that they’re using less and less Hardwood. There are a lot of substitutes, mostly MDF, that are going into cabinetry that in the past would have been all Hardwoods.” He said transportation “hasn’t gotten any worse than what we’ve been experiencing over the last year. We’re able to get trucks, but of course, it’s at a slightly higher price than we were paying six months ago.” In Connecticut, the Hardwood market is “down a little bit,” a lumber source said. “Obviously, Oak is struggling,” which he attributed to the U.S.- China trade dispute. “We’re not being able to move Oak out of here.” Yet, quantity wise, Oak in all colors is still his company’s best-selling species. “We’ve been selling a lot of lower-grade stuff in mat material and ties.” Mats are at least eight inches thick, while railroad ties are 7x9, he said. The Connecticut contact also markets species native to his area, such as Beech, Birch, Maple, Cherry, Walnut and Ash. “We sell to an array of customers -- everyone from pallet mills to farmers and your everyday homeowners and big corporations.” In Massachusetts, the market is about the same as it was six months ago, a distribution source said. “Demand is still OK, in regard to domestic business,” he 8 SEPTEMBER 2019 n NATIONAL HARDWOOD MAGAZINE Please turn to page 65 Please turn to page 65

SOUTHEAST WEST COAST Southeastern lumber sources experience challenges in recent weeks and cite a softening market and ongoing challenges in exports. The Hardwood market for a lumber manufacturer in Georgia is “pretty challenging,” especially in regard to exports, a contact said. “I got an email from a young lady who works for us in China and she said sales as recently as June for distributors and factories were one-third to one-fifth of what they were in May. They were expected to buy some in June, but if it continues like that it will be two or three months before they start buying again.” His company sells primarily Red Oak, in all grades, 4/4 thickness, and also offers White Oak, Ash, Poplar and Cypress. The Red Oak has been sold directly to Chinese distributors and factories for use in flooring, but the Georgia company has been losing market share to LVT and other Hardwood alternatives. “I think they’re going to less expensive products because housing is down over there, so they’re going to less expensive furniture, less expensive cabinets and that’s having a direct impact on solid Hardwoods. I know Vietnam is supposed to take up some of the (export) slack, but it can’t take up the volume that China was using. Poplar is doing better now, but Poplar is not going to carry this industry. This industry is not going to make it on Poplar alone.” On the plus side, his industrial markets are doing well. Yet the Georgia source said his market is slower than it was six months ago, and he doesn’t see it improving much even if the tariff situation is resolved. “If they settle the U.S.-China trade dispute, I think it will improve consumer confidence. It’ll get everybody pumped up a little bit, but I just don’t see it making a huge difference on (China’s) demand on American Hardwoods.” In Arkansas, a flooring manufacturer who sells to distributors said the market is “a bit soft.” His business buys Red and White Oak, Hickory and Walnut, some in all grades, mostly No. 2 and 3 Common, one-inch thickness. He, too, lamented the slow export market and tariffs. “The housing market is not as solid as it should be. Another factor is a lot of imitation products are being used in place of wood.” Lumber providers on the West Coast report that market conditions are anywhere from soft to steady. In Oregon, the domestic market is softer and companies are buying just what they need and no more, a distribution yard contact said. “There’s more lumber available and they’re starting to back up just a touch. People don’t feel that there’s an urgency to buy…. Industrial markets, pallet, low grade, rail ties are all very steady and seem to be holding up.” He described export markets as “engaged and generally active, but also very price conscious.” The lumber contact perceived the overall market as worse than it was six months ago because of the U.S.-China trade war. “What it has done to pricing on a couple of species has resonated throughout the rest of the market,” he said. Soft Maple is the species most in demand, in Common, and Poplar is the number two seller, 4/4 thickness. The company also distributes Red and White Oak, Hickory, Ash, Soft and Hard Maple, Birch and Cherry. His flooring customers have been losing market share, “but I think cabinetry, furniture, millwork are fairly optimistic about their outlook and order file.” Transportation hasn’t been much of an issue for the lumber source. “We’re able to get trucks as we need them. Availability seems to have reversed itself. It was a bit of concern before.” Transportation also has been a non-issue for a California lumber wholesaler and moulding manufacturer, who said his market is OK. “It certainly could be better, but it’s doing all right,” he said. About 70 to 80 percent of his customers are custom home builders who buy framing lumber, with other contractors and some retail comprising the remainder. Poplar is his top-selling species because of a large paint-grade market; White Oak, Walnut and Maple in upper grades also are in high demand, in 4/4, 6/4, 8/4 and some 10/4, 12/4 and 16/4 thickness, the contact said. He also sells Cherry, Birch, African Mahogany, Fujian Mahogany, and Ipe. “The housing market out here is very good,” the source said. “Actually, we’re underproducing housing at the moment.” He acknowledged that was a good problem, though it pushes house prices out of the market for many people. Please turn to page 65 Please turn to page 72 SEPTEMBER 2019 n NATIONAL HARDWOOD MAGAZINE 9