As the first day of spring arrived, renewed optimism was felt by some lumber contacts as warmer weather was upon us. Of course, there was the usual slowdown caused by spring thaw for loggers to contend with. Also, the rollout of the COVID-19 vaccines have started across many provinces, although at a slower pace than planned, but is seen as a positive. Meanwhile, a third wave of the Covid virus is also cause for concern, as it could mean another lockdown as case numbers continue to rise. Businesses are following safety and distancing protocols to avoid shutting down their operations.
Sales contacts commented that most grade lumber markets are performing well. Demand from cabinetmakers, flooring and furniture manufacturers, moulding and millwork, and wood component companies is strong and driven by the robust U.S. housing market, and the strong resale and renovation markets in Canada.
Canada is seeing a boom in young first-time home buyers which has driven the prices of homes up, as they were not spending on travel, restaurants, in-store shopping and entertainment due to the pandemic. According to statistical reports, despite a slight slowdown in construction in some parts of the U.S. in mid-February, new home starts and completions are close to historical averages after being below that threshold since 2007. Spending on single family homes and remodeling are at historical highs. This is good news for the Hardwood industry as a whole as it has given companies a much-needed boost.
There were shortages in some areas, and it was felt that a recovery would not be quick. The lack of skilled workers, lower sawmill output, along with road bans are impacting Hardwood supplies. It is expected that production will rise to meet demand once warmer weather arrives.
Contacts noted green Ash supplies were low relative to demand. Reported prices have trended higher. Sales to the U.S. for kiln-dried stocks are noted as steady, while international business, especially to China and the greater Southeast Asia region are noted as strong. Low availability and solid demand are pushing prices higher.
Aspen production was limited most of the winter and still had not picked up at the beginning of spring. Sawmills and wholesalers are not having any difficulty shipping production as demand is steady as are prices for the Common grades and firm for FAS and Select. Some contacts noted kiln-dried inventories were thin for many grades and thicknesses as market interest continued at a steady pace.
Basswood demand has increased due to the new home construction and renovation markets in both Canada and the U.S. as it is used in several applications, and the ongoing trend of painted finishes makes it an excellent choice. Sawmill production has been contracted for some time for many species. Basswood supplies have not been meeting demand, and prices have hedged up for selected items. There is a shortage for thicker stocks. Kiln-dried inventories are also low compared to buyers’ needs.
With new home construction and renovation on the rise, demand for whitewoods, including Birch, have increased. Depending on areas contacted, production was low due to poor logging conditions. Developing green lumber supplies are also not meeting needs with prices on the rise. Contacts note low inventories for kiln-dried Birch for most grades and thicknesses.
Hard Maple continues to be a consistent best seller. Sawmills were unable to respond as fast as buyer interest rose. Production has improved somewhat since the winter, but prices are reported as continuing to rise. Kiln-dried inventories are also low for this species.
Soft Maple markets are also strong, and production of this species is not sufficient to meet market demand. Prices, as for many species, have risen. Demand of No. 1 Common and Better kiln-dried stocks is noted as better than for the No. 2A.
Export markets are seeking more Red Oak, led by China, as a result of the announcement on extended tariffs being pushed back to September for Hardwood lumber and logs. China’s economy is continuing to recover from the pandemic lockdowns. Domestic markets are also reported as doing well for this species. Kiln-dried supplies however are not sufficient to meet buyers’ needs.
Production of White Oak is also not meeting increasing demand for this species. Demand for all grades of White Oak kiln-dried stocks are pushing prices higher.
