Inland West Business
Inland West Business Trends By Terry Miller President Northeast Business Trends By Sue Putnam Editorial Director In the Inland West region, a Wyoming sawmill source reports a flat Pine market. “There are a few shining stars in the lumber market that have been basically unfazed by the weather or pricing fluctuations,” he said, citing 1x6, No. 2, No. 3 and No. 4. “1x4 through 1x8, No. 3 and No. 4 have been pretty strong considering the dimensional market we’ve gone through the last three or four months,” adding that T&G products and interior Pine paneling also are doing well. “We consistently carry about a six-week order file on those products.” Ponderosa Pine is the top-selling Softwood for his company, which also produces industrial shop products and ESLP studs. The Wyoming contact believes the market is weaker than it was six months ago. “The dimensional market was so inflated due to difficulties with freight” in the latter part of 2017 and first quarter of 2018, he commented. Then, as rail cars and trucks became available, a “fragile balance” was disrupted and the market became overproduced, he said. “Now Softwood Buyer Ad.indd 1 Continued on page 55 Quick Response - Deep Knowledge Relationships Built On Trust www.uslumber.com A wholesale distributor in New Hampshire has seen his market slow in the last six months. “Prices have readjusted quite significantly and usually when that happens, customers decide they’re going to pull in the reins a little bit on activity. I think the yards and the builders are still steady, but they’re not as busy as they were.” He noted that abundant rainfall – about double the usual amount received late in the year – has dampened local supply. The contact’s top-selling Softwoods are Western and Eastern Spruce, No. 2 and Better and stud grade; and 1x’s of Eastern White Pine in all grades. His company also sells plywood, OSB, Southern Yellow Pine dimensional lumber, moulding and trim. Customers are a mix of end users, retail lumberyards, stocking distributors and stocking groups. “All are voicing concern that they’re not as busy as they were earlier in the year and that it was a lot busier at that time than it should have been,” possibly because federal tax cuts helped spur spending by homeowners, he said. “So maybe we’re headed back to some kind of normalcy.” One customer who does national projects for hotels and restaurant chains said he has been rebidding on building projects that were postponed when materials got so pricey. “So that could be a good thing for next year,” the source said. In Maine, a sawmill contact said prices on Eastern Spruce dimensional lumber seem to have bottomed out after six weeks “of a falling market that nobody could seem to get a grasp of. I think we’ve returned to prices we were trading at in 2015 before this whole historical, hysterical market.” His top sellers are Eastern Spruce dimensional lumber (2x4’s from 8’ to 16’), as well as Eastern White Pine. “It saw a small upswing over the last 1-1/2 years, but not that big upswing that Spruce did, so consequently we haven’t seen a big downswing. Eastern White Pine has much, much more stable pricing.” His diverse customer base includes pro dealer yards, buying groups, wholesale distributors and industrial end users. “Wholesalers right now are having a hard time just buying and making a profit because the customer wants to pay less than what the mill wants to sell it to them for, so there’s a little bit of a squeeze right now,” the source said. The Softwood market has been consistently strong since last summer, according to a wholesale distributor in central Connecticut. “The market has been good, pricing has been up and demand has been high,” the contact said. Ninety-five percent of his customers are retail lumberyards who have been clamoring for 8/18/2017 10:40:22 AM Continued on page 55 Page 36 Softwood Forest Products Buyer n January/February 2019
Southeast Business Trends By Gary Miller Vice President Quebec/Ontario Business Trends By Richard Lipman Guest Writer Southeast lumber markets are reportedly fairly soft overall with all sources citing supply and demand issues. An Alabama lumber supplier said, “The market’s been off over the last six months, but the year has still been great.” His 11 sawmills are based in Arkansas, Georgia and the Carolinas. “Business is just not as good as the forecasts were as the year began. There’s an imbalance of supply and demand.” His company’s top seller is Southern Yellow Pine dimensional lumber, 2x4 through 2x12 in all grades. It also produces one-inch boards and 4x4s. Business has been slow among the contact’s customers, who are primarily wholesale distributors, home centers and industrial pro dealers. “Transportation is better than it was. There are more trucks available, but they’re available because there’s not as much wood being sold,” he commented. A lumber manufacturer in South Carolina also fretted about a supply-anddemand imbalance. “The market is about as depressed as it’s been all year,” he noted. “Prices have plummeted since the early summer and profitability has been dramatically curtailed. There doesn’t seem to be anything in place that’s going to turn it around prior to the new year.” His business sells Southern Yellow Pine, all grades, 2x4 through 8x8 to large retail building supply stores. “Supply is exceeding demand dramatically right now. I think that the forecasts for consumption on the demand side have fallen off more than people were projecting. Realistically, the numbers for new home starts and existing home sales are going to be flat or even a little lower than they were a year ago,” he said. The source noted that the Southern Pine belt has weathered two hurricanes and “an incredible amount of rain,” which curtailed logging and, to some degree, the supply of lumber. “But the supply-and-demand factor is what really dictates our business and the way we forecast our business. Right now, I would say supply is exceeding demand and probably will for the short term.” In Mississippi, the Pine market is “pretty soft,” and down from its record highs earlier in the year, a lumber wholesaler source said. “I think we’re looking at the same type of prices until springtime,” he commented. “I don’t think we’re going to have a volatile year in 2019 like we did in 2018. That was pretty unusual.” The contact sells mainly low-grade Southern Pine to an industrial customer base. “We feel like the markets we sell to are going to continue to strengthen,” he said. “We had a very good year in 2018 and we expect it to be better in 2019.” The Mississippi source said the current U.S. administration has done a good job “in leveling the playing field” and in handling the overall economy. While he noted that tariffs Continued on page 55 OCFP IS AN INDUSTRY LEADING PRODUCER OF SPECIALTY SOFTWOOD PRODUCTS MANUFACTURED FROM PACIFIC NORTHWEST LUMBER. . MAIL: www.ocfp.com Some minor improvement has been seen in SPF 2x4 prices in the last few weeks, which is welcome. One Ontario lumber producer said, “Prices were so good, we were on top of the mountain and we thought we could continue. But it is a long way down that next step!” A Quebec wholesaler commented that, “Prices have seen a 0-0 drop, and normally when they go down, they go down 40 percent from peak, and we are just about there now. By spring you might see things turn around.” Still, firms were happier when the prices were high. Factors out west are better now. The British Columbia situation contributed to the strong eastern prices earlier this year. “You could see some shutdowns with the impact of fires and the beetle situation, and now with better rail car availability, the things that were helping eastern mills have corrected themselves.” An Ontario sawmill representative noted that the consumption of wood might Continued on page 55 OREGON-CANADIAN PRIDES ITSELF ON CONSISTENTLY OFFERING THE HIGHEST QUALITY FOREST PRODUCTS AVAILABLE ANYWHERE. 158-YEARS EXPERIENCE / 25-ACRE FACILITY OUR PRODUCTS: DOUGLAS FIR HEMLOCK WESTERN RED CEDAR ALASKAN YELLOW CEDAR Contact Us: 503-647-5011 31950 NW Commercial North Plains, OR 97133 Softwood Forest Products Buyer n January/February 2019 Page 37
