WEST COAST BUSINESS
WEST COAST BUSINESS TRENDS - Continued from page 47 have firmed. Other Doug Fir products, such as surfaced timbers have continued to stay strong even though 2” dimension was declining.” On customer mood, Southwick commented, “All I can say here is that there seems to be mixed reviews about what the 2nd quarter will bring. Some customers are still optimistic that the recent price decreases are short lived, and we will see a robust lumber market through the summer. Others think that the 2nd quarter could be fairly quiet and are worried that pricing is still too high for the end user and more of correction needs to take place before demand will pick back up.” Southwick concluded, “Log prices continue to stay strong and will most likely continue to stay strong as we head towards the summer months and fire season is already on the mind of foresters and loggers.” Darren Duchi of Siskiyou Forest Products, Anderson, CA commented on supply and demand, “Not much balance, more demand than supply, not sure when that will turn. As long as there is consistent building, the market is going to remain ok, the challenge is the requirement of cash, it’s the number one enemy right now because of the increased cost of production/ prices.” Duchi continued, “Customers seem fairly confident, fairly optimistic, most of the issues on our end, like trucking come and go, they kind of take care of themselves.” Finally Duchi had this to say about the market moving forward: “Hold on to your hat; we could be in for a little bit of a wild ride.” Jim Walsh, of Rosboro, Springfield, OR, said, “The West Coast lumber market has softened slightly over the last few weeks. Buyers are buying cautiously given the relatively high prices. High log costs and limited log availability continue to support lumber prices. Engineered wood demand has been strong throughout the first quarter.” In regard to what his customers are reporting about the business climate, he said, “The distribution channel reports that they are very busy with plans and the building season should be active.” Walsh added that, “skilled labor and transportation seem to be restraining growth. It is difficult to hire qualified people at the plant level, truck drivers and skilled construction labor. Both rail cars and trucks are in short supply.”■ SOUTHEAST BUSINESS TRENDS - Continued from page 23 location of his distribution center. “We supply some other retailers that ship products nationwide via common carriers; we supply those customers with full units out of our distribution here, and they break it down and build it up to whatever their customers need. We see a lot of that nowadays,” he explained. “That’s SOUTHEAST BUSINESS TRENDS - Continued one reason we’re running distribution out of this area. We bring it in and distribute it out to those guys, so they don’t have to buy it by the truckload, they can buy it from us by the unit.” ■ QUEBEC/ONTARIO BUSINESS TRENDS - Continued from page 23 of Douglas Fir, he said Cedar sales have struggled a bit, likely because of rising prices. “Those sales will be slightly off; they were last year and I expect it will be this year,” he said. “Otherwise, pricing has been pretty steady and demand has been pretty steady.” He said his company, which sells mostly into local markets within a few kilometers of the mill, has seen few issues in recent months, although he did mention some minor problems with Western Red Cedar. “Of the suppliers we deal with on the West Coast, only one said that log supply wasn’t going to be an issue for them this year,” he said of the Cedar. “We will be struggling to meet the demands; the U.S. market has been strong for several years now and that obviously affects the availability on the Canadian side, but overall it’s not too bad. The price of Cedar is up quite a bit from last year, and for the last four or five years it has been generally climbing.” Those on the wholesale end of the Softwood business also reported steady sales, with the sales manager at one Ontario wholesale operation saying that he hopes and expects the current volume numbers to continue well into 2018, and perhaps into 2019. “It has been good so far, and I see nothing that would disrupt it substantially,” he said, adding that his company, which sells SPF primarily into the Canadian market, has seen reliable growth in sales for the past couple of years. Still, he said, concerns remain about access to the market in the United States. “Everyone is a bit worried about the U.S. market and how long the tariffs will stay in place,” he said. “For our U.S. business, it is not helpful.” He said that with a tariff of nearly 20 percent, it has made the slim profit margins even more of a challenge. He added that for Canadian companies that rely on their exports to the United States, the tariff has forced them to look differently at their business model. Continued on page 49 YOUR SOFTWARE SOULMATE We do. Call it unconditional, all-encompassing, you name it. As a software developer committed solely to the lumber and building materials industry, DMSi has every corner of your operation covered. From production and procurement to integrated accounting. We make sure no corners are cut and no detail is left out. And that’s a promise we’ll hold true. visit .com Page 48 Softwood Forest Products Buyer ■ May/June 2018
QUEBEC/ONTARIO BUSINESS TRENDS - Continued from page 48 “Some have tried to expand their local operations, but it takes time to develop contacts and to make inroads into the market,” he said, adding that companies are particularly hesitant to switch their resources when it remains unclear how long the U.S. tariffs may remain in place. “Some are hoping to be able to wait it out.” He noted that with Donald Trump as President of the United States, it is difficult to know exactly what will happen. “Our Canadian sales remain steady and we hope that the U.S. tariff situation is temporary, but it is difficult to say. The guy in charge, you never know what he will do next,” he said. The owner of one Quebec mill said he too was pleased with the steady sales numbers, and added he was less concerned about American politics because his company sells almost exclusively into the Canadian market. “It is about the same as last year; it’s good,” he said of Softwood sales, adding that he did not see any supply or labor issues disrupting the solid gains. “I do not see any changes coming.” Back in Ontario, the mill vice president noted that in addition to the short-term changes, there are also larger issues that are having both short- and long-term effects on the market. “So, certainly the trends in construction do have an impact,” he said. “We sell a fair amount of prefinished wood siding and it has been a fairly strong market for us for a few years. I think that has to do with magazines showing wood finishes as a trendy product.” He added that Cedar has become a popular option for decks, although he noted that even Cedar requires some maintenance. This has provided an opening for nontraditional materials. “PVC is affecting the fencing market, which has declined a little bit for us,” he said, adding that composite materials continue to make dents in a number of markets once dominated by wood. “I suspect that will continue. PVC and composites have certainly improved since their early issues. They still have issues, but certainly less issues than there used to be.” The even larger issue, he said, is the fact that so much depends on the viability of the market in the United States, and access to those consumers. “There are so many factors, with price, we’re really somewhat at the mercy of the U.S. economy and how it is doing, and the Softwood lumber tariffs that have been applied,” he said. “The dumping and the countervailing duties have kept U.S. demand down a bit, I would presume. If those were dropped, prices would go down as well.” ■ INLAND WEST BUSINESS TRENDS - Continued from page 24 ago, some items are even stronger, and a few items are adjusting at this point in time,” she stated. She sells Douglas Fir, SPF, Hemlock Fir and Ponderosa Pine. Of those species, she said all are selling fairly evenly. “I’d say right now, of everything we’re dealing with, the Hemlock Fir is the least desirable,” she commented. She said transportation is challenging, especially in Montana, where certain roads are more difficult to travel. “Logistics is challenging,” she stated. “There are certain lanes that have opened up that are doing pretty well, but there are some lanes that are a huge struggle, such as Montana heading south to Colorado and into Idaho. It has been challenging, but some lanes have opened up. In the old days, it would take maybe two days, maximum, to fill all the loads we had available; now it’s seven to 14 days to get a load to haul, and that’s the difference from last year at this time.” Supply isn’t a problem in her area. “Log supply, yes, we are in good shape,” she commented. Her customers include lumberyards, end users and wholesalers. A lumber source in Colorado said the market in his state was also strong. “It’s very well, as a matter of fact,” he stated. He sells Hemlock Fir, White Fir, SPF and Douglas Fir Larch. “They’re all moving quickly,” he said. Transportation is a concern for him, he said, especially getting shipments from Canada. “Trucking is an issue, but I think trucking is an issue anywhere, and for us, getting anything out of Canada right now is just a nightmare,” he explained. “It seems like it’s going to be a problem, and it doesn’t seem like it’s going to be rectified anytime soon.” He said his only supply concern was with SPF and machine stress rated SPF. “That’s been difficult at best to get, but the rest, we’re able to get our hands on it. It may not be at the tally we want, but we can still get our hands on it,” he stated. He sells wholesale to retail only, including big-box stores and retail lumberyards. ■ WWW.SOFTWOODBUYER.COM Continuous wood drying greatness by Valutec Valutec is one of the world’s largest suppliers of drying equipment for the sawmill industry, with more than 4 000 lumber dry kilns delivered during nearly a century. Valutec’s TC continuous kilns combine extremely high capacity with game changing flexibility. Still, the end products impress with exactly the quality that you and your customer expect. Read more at www.valutec.ca Ingo Wallocha Managing Director Valutec Inc Mobile +1 416 640 7478 Phone +1 778 868 3695 ingo.wallocha@valutec.ca Softwood Forest Products Buyer ■ May/June 2018 Page 49
