Northeast Business Trends – June 2022

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Industry sources characterized the Hardwood lumber market in the Northeast as currently strong, as some noted a sense of supply and demand finally stabilizing.

The vice president of sales and marketing for a West Virginia-based sawmill agreed that business is good. “It’s not what it was a year ago,” he added, “but the circumstances are different than what they were then. The COVID shutdowns that caused all kinds of grief with the supply chains, some of those still exist, but there is definitely more lumber making its way through the channels to the places that it needs to get to.”

He said that while he has seen prices dip and rebound on Red Oak and Cherry, White Oak seems to have been on a continual upward climb that has recently plateaued. “Hard and Soft Maple have been on fire and going wide open for the domestic cabinet industry,” he continued. “I think the prices on it have plateaued and there seems to be a little more production of that available right now. But again, there is nothing stacked up in our warehouses as unsold.”

The president of a New York-based lumber supplier noted that his company is likewise seeing strong sales in 5/4 Hard Maple in the upper grades, as well as 4/4 Soft Maple. He added 4/4 and 8/4 White Oak as a strong seller, although not on par with the Maples. For his company, the most noticeable change has been the numbers relating to their exports. “We send logs to China, and that is coming really slow from what it was two years ago,” he said. “We’re 70% off from those numbers. The shipping challenges, especially for exports, have been terrible.”

A sales representative for a distributor of specialty lumber based in Pennsylvania sees demand remaining high for the Maples, as well. While his company deals with all species of Appalachian Hardwood, he stated, “Soft Maple is the hottest item in the market right now, followed probably by Hard Maple. Common Hard Maple and Hard Maple uppers are very strong, as are Walnut Nos. 1 and 2 Common. Upper grade sales have slowed down in Walnut.”

All sources contacted mentioned transportation-related factors as an ongoing concern, both for their companies and end users. “Basically, we’re seeing fuel surcharges, cost per mile domestically going up, oftentimes as much as doubling, so we’re constantly checking freight rates,” noted one source. “We don’t quote anything until we know exactly what we’ve got to pay to get something moved.”

The vice president of sales and marketing for a Maine-based sawmill selling to end users in all market segments, both export and domestic, reiterated, “There is no doubt that the three biggest challenges that everybody faces is labor, pieces and parts, and transportation. Equipment, replacement motors, everything as basic as nuts and bolts – everybody faces that issue with the international supply chain disruptions that we’ve experienced. Transportation, whether it’s domestic or overseas, is still an issue. Our group has done a great job and we’ve maintained some great shipments, but they are pulling their hair out, they’re working hard to secure trucks and bookings.” For his company, sales of 4/4 Hard Maple and Red Oak, No. 3 Common and Better, are the strongest.

Another lumber source noted how uncertainty relating to transportation – both in cost and availability – has resulted in an unintended decline in customer service. “You just can’t make promises anymore,” he said, “people don’t know how to plan. So unfortunately, it’s putting undue strain on a strained industry because you’re not nearly as efficient, nor can you follow through with promises.”

Finally, some are anticipating an inevitable market correction. “We all have a strong sense that there’s a correction coming,” stated one source. “We don’t know when that will be, whether it’s the last quarter of 2022 or the first quarter of 2023. But I think we’re just waiting to see when that actually comes to fruition.”

By Miller Wood Trade Publications

The premier online information source for the forest products industry since 1927.

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