Contacts in the Lake States region accounted for average hardwood activity, with many stating they expect supply shortages in the coming months.
An Indiana hardwood supplier said, “Business activity for us and our customers has been slow. Market conditions are better than last quarter, but things are still slow.”
The source specializes in the production of heavy stock, offering 4/4 through 16/4. Species at the facility include: Red and White Oak, Walnut, Cherry, Hard and Soft Maple, Poplar, Hickory and Ash. When asked about individual species movement, she said Walnut and White Oak are the best moving items. “We don’t do a lot of Hard and Soft Maple, but they are the least requested on quotes.”
She mentioned the Chinese New Year coupled with uncertain interest rates as the primary factors affecting the hardwood market currently. “Business will pick back up in China, and they will be ready to place orders. Interest rates are probably the largest factor because they are uncertain. Everyone is holding close to the vest until they see what is ahead.”
In Michigan, one source said activity for hardwoods, “is pretty good right now. We’re not looking great, but I would say activity is better than average. It’s definitely better than the last quarter.”
The source, whose largest volume of production has been in White Hard Maple, also processes Red and White Oak, Hickory, Soft Maple, Walnut, Cherry and other species (4/4 through 12/4, No. 1 Common). He mentioned Hard and Soft Maple, Walnut and White Oak as the best-moving species. “Cherry and Basswood are slow right now,” he explained. “Hickory is an okay mover.”
His customers accounted for decent market conditions, however, he expects supply issues in the near term. “We haven’t had any transportation issues, but late cold weather has not been good for logging conditions,” he said. “Log supply is not good. I think we’ll see supply issues down the road. Interest rates are affecting the RV industry more than housing or anything else.”
A contact in Wisconsin said hardwood market activity is “pretty good. Market conditions are about the same as the last quarter for us,” he commented. The source, who specializes in most domestic hardwoods both green and kiln-dried noted White Oak as a popular item and Basswood and Aspen as the slowest in species movement.
As for his customers’ immediate markets he said, “I think domestically things are picking up a bit. I think exporting will pick up as we move into the warmer months.”
He mentioned the pallet industry is experiencing some tight conditions. “The biggest issue for the pallet industry is random width, No. 3 Common lumber. The pallet industry tightened up and that’s probably one of the most difficult grades to make pallets from,” he commented.
Overall, the hardwood supplier is confident in what is ahead for the hardwood industry. “Everything that I am hearing is positive, we’re expecting things to pick up this summer,” he said.
Pricing seems to be less of a concern than availability of lumber for hardwood suppliers in the Lake States. With many expecting busier conditions by the summer, shortages are expected at the log level. Most contacts accounted for stable to active business conditions for the current quarter.
