Northeast Business Trends – May/June 2022

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Softwood market trends in the Northeast are in a state of flux, according to some industry sources located there.

An executive in sales for a lumber wholesaler in Pennsylvania explained, “The market is volatile, if anything, as far as prices being all over the place. Random lengths do not seem to be keeping up with what the actual prices are, and there have been considerable drops at the mill levels.”

He noted that while supply does seem to be better compared to a few months ago, there’s room for improvement. “As far as availability,” he said, “we’re still seeing a lot of issues in getting Softwood, particularly timbers right now. Production levels are still below what they should be at this time.” Their company deals primarily with Southern Yellow Pine (in Nos. 2, 3, and 4 Common), although they also move SPF and plywood.

A sales manager for a sawmill in Maine agreed, “The Softwood market is a little bit of a mess right now. The market topped out maybe two weeks ago and so we’re transitioning. We were at all-time, 40-year highs, so nobody knows where this thing is really going to wind up.”

He described the market as being in the middle of a price discovery, in which no one knows where the price starts, making it very difficult to nail down. “There are big differences in quotes,” he explained, “and sometimes, there can be a $200 difference between the top quote and a low quote, making it hard to pin down.”

He credited much of the shift to supply finally catching up with demand, particularly in some species. “There seems to be an overabundance of Southern Yellow Pine,” he noted, “and that’s pushing Spruce down.”

His company produces approximately 300 million board feet of Spruce annually, including everything from 1×3 and 1×4 strips and 1×6 boards, all the way up to 2×3 through 2×10 in dimension lumber (6’ to 16’ lengths). He noted that 2×4 is still the bestseller since that is the standard for building across most of the county. “Whereas, when you get into 2×6 walls,” he added, “that’s just pretty much the northern tier, where they need 6” walls for R value. So, 2x4s are always our biggest seller.”

Selling to a mix of end users, distributors, pro yards, and buying groups, he detailed how his “customers are frustrated because they have wood in their yards that’s expensive. And they’re fearful that the market’s gonna fall and they’re gonna take losses on that inventory. They’re trying not to buy anything, but they’re so busy, they get forced every week to buy something.” Still, he reiterated that demand is high. “I mean, you have 1.8 million housing starts,” he added, “that’s a good thing.”

The sales manager for a sawmill in New Hampshire agreed that the market is strong and demand remains high for his company’s primary focus of Eastern White Pine sales in 4/4 thicknesses (NELMA grades).

Interestingly, transportation setbacks and backlogs are less problematic currently for all interviewees. For the New Hampshire source, transportation delays have resolved rapidly. “In just the last week and a half, I have more room than I’ve had in a year – it’s almost empty,” he said. “I’m not having an issue but I’m right off of the interstate, though, so I might be the only one saying that.”
Despite fewer delays, transportation costs remain a concern. “Our transportation costs have doubled in a 12-month timeframe,” noted our Pennsylvania source. “You can move the wood, but you have to pay whatever the going rate is, and that’s part of the deal.” To cover the cost increase, his company has had to raise their prices anywhere from $2 to $500, in general. “We’ve gone from from paying $4.60 a mile to $6 a mile in some instances,” he added.

By Miller Wood Trade Publications

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

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