The New England Lumbermen’s Association (NELA) met at Fort William Henry Hotel in Lake George, NY recently for a summer meeting.
The meeting included a roundtable discussion moderated by Bob Chase of Quabbin Timber Inc. and Chris Castano of Maine Woods Company LLC.
Among the many comments offered by those in attendance during the discussion, and as identified by the segment of the wood products industry that each represents, were as follows:
Distribution yards:
There is concern with the quality and the availability of White Oak, given that the stave market is still strong and they tend to gobble up the nest logs.
A variety of products are being offered, such as exotic woods, mouldings, sheetgoods, and primed products, which has helped them to keep things going.
Smaller inventories have helped them to moderate big swings in lumber pricing and protect them from having inventory that is priced too high.
Housing/Commercial Building:
There is evidence that smaller starter homes are beginning to take hold with builders as they are moving away from the 3,000+ square foot homes that have been the focus in recent years.
The demand appears to be stronger with millennials looking to buy their first homes vs. people looking to upgrade into bigger homes.
Residential millwork projects are still heavy to painted looks and this does not appear to be changing anytime soon.
Commercial demand for FSC lumber appears to be picking up again.
Cabinets:
Recent improvements in the manufacture of composite materials (new adhesives, for example) allow for better screw holding capabilities and taking finishes easier, which is in turn making composites a more attractive material to use in cabinet making.
Business in the first half of 2023 has been stable. Forecasts had been for a 5-10 percent decrease but they have stayed above those forecasts.
Having said that, large cabinet manufacturers are starting to see inventories building.
There are currently no signs of a recovery of Red Oak in the cabinet market.
Flooring:
Seasonal sales have been good but there are concerns about what happens moving forward now that the seasonal bump is nearly complete.
There is no solid forecast for the next six months. Without that, one flooring manufacturer’s strategy is to simply maintain inventory and guard against any buildups of finished goods. With that said, the same manufacturer is looking to reduce lumber inventory.
Cherry and Birch demand has decreased, while Red and White Oak are “so-so,” with Hard Maple seeing a slight increase in demand.
Railroad ties:
Tie inventories are building but are still behind demand and have been behind for quite some time.
One manufacturer said they are receiving more ties than production can handle.
The forecast is that demand will continue to be strong for the foreseeable future as railroads target fully replacing all tracks every 30 years to maintain safety.
Truck flooring:
Lumber inventories are very good right now as there is a lot of low-grade lumber available. This was not the case last year as lumber was harder to find.
Demand for truck trailer flooring continues to be strong and all companies currently in this segment of the industry cannot produce enough to satisfy demand.
The forecast for the next 6-8 months is very strong.
Pallets:
Cant prices have been holding but there is some evidence of softening recently.
Pallet manufacturers have been reluctant to slow down because of lessons learned during COVID, when many pallet makers missed orders when demand surged, and they couldn’t ramp up their production fast enough.
One manufacturer said 2022 was a record year for them and could have been higher if not for labor shortages, however, 2023 has had a slower start. Summer has been better but not what they have predicted.
Exports:
There is a lot of availability of space in containers right now.
Consequently, there has also been a significant decrease in overseas shipping rates.
The first half was good for shippers, but carriers are hungry for cargo now as volume is slowing and profitability is down.
Demand for Ash in China is still strong, for what little bit of lumber is available.
Red Oak is continuing to pick up in Europe, with one exporter claiming that Italy and Spain have been bright spots for the species as a White Oak substitute.
One exporter said the pendulum for their business seems to be swinging back toward being heavier to export while another exporter claimed they only have one Chinese customer left and that is a long-time customer, and that overall demand has not recovered from COVID. Additionally, the Chinese government has been tightening its grip on the economy making it harder for private individuals to prosper.
For further information about the New England Lumbermen’s Association, please contact Chris Castano at ccastano@mainewoods.net.
