One contact commented that business for them is very strong, both for domestic and export markets, with supplies being tight. They need more logs at the mill, and the cold winter weather that hit in late December and early January was just what was needed to improve that situation.
Other contacts noted that demand from the U.S. had been sufficient to keep inventories low and prices pressured. Going through the holiday period, some contacts stated demand remained steady for most species and it didn’t look like markets were going to slow down. It was felt that the pent up demand for housing in both Canada and the U.S. would likely keep new home construction strong in 2021.
Basswood sales are good due to improved home construction and renovation. The kiln-dried inventories that had accumulated have now been worked down. Now, tight supplies and demand are driving price inflation. Sawmills are shipping total green production, but interest is better for upper grades than for the Common grades.
Contacts note that demand for Ash is mixed. The FAS demand is very good, followed by No. 1 Common. A few contacts noted interest in No. 2A is lagging other grades. With the limited live Ash growing stocks, this has decreased the Ash log availability and the volume entering the market. The shortages as well as the slight increase in demand are causing prices to firm.
The shortage of Birch has been a key factor for improved sales. There has been a limited availability of Birch along with Hard and Soft Maple output which pushed end users to use alternative species. Buyers’ needs are exceeding supplies of Birch, resulting in rising prices. Kiln-dried inventories also remain low.
The regionally important species, Hard Maple, is still reported as the best seller at this time due to home construction and renovation activity that has driven the strong demand for Hardwood finished goods. Hard Maple remains a favored species by consumers and designers. Demand is outpacing supply in many areas. The pandemic continues to cause labor shortages and with poor logging conditions during the end of 2020 have kept mill output low. Kiln-dried prices were being pushed higher by the strong markets and its limited availability.
Soft Maple demand is steady, with shortages being felt for most grades and thicknesses. Demand is best for the upper grades and premium color materials note contacts. Green markets are also performing well. Hardwood wholesalers noted that higher sales are obtained for color designations.
Markets on the domestic and international fronts are solid for Red Oak. Contacts report that kiln-dried inventories of this species are thin with prices continuing to rise. Green Red Oak production improved slightly during the last two months of 2020, with buyers welcoming the additional supplies. Prices remain firm for this species they noted.
There is steady demand for kiln-dried White Oak, with shortages being felt and driving prices.
According to Canada Mortgage and Housing Corporation (CMHC), the trend in housing starts was 231,491 units in November 2020, up from 222,989 units in October 2020. This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
“The national trend in housing starts in November increased,” said Bob Dugan, CMHC’s chief economist. “Multi-family SAAR starts partly rebounded in November from two consecutive declines, offsetting a decline in single-detached SAAR starts and driving the overall trend higher. Multi-family starts were particularly strong in Vancouver and Montréal in November.”
The standalone monthly SAAR of housing starts for all areas in Canada was 246,033 units in November, an increase of 14.4 percent from 215,134 units in October. The SAAR of urban starts increased by 15 percent in November to 233,106 units. Multiple urban starts increased by 22.5 percent to 177,661 units in November while single-detached urban starts decreased by 3.8 percent to 55,445 units. Rural starts were estimated at a seasonally adjusted annual rate of 12,927 units.
With the pandemic being felt on a national scale, Canada’s recreational property market is forecast to increase 8 percent in 2021, according to Royal LePage. The real estate company reported that 86 percent of recreational property regions are reporting lower inventory as demand outpaces supply. And, 54 percent of recreational property regions are reporting a significant increase in buyers who are purchasing a new primary residence where they will work remotely.
Fifty-four percent of regions surveyed reported a significant increase in buyers looking to buy a primary residence in a recreational market, enabled by their ability to work remotely.
The number of retirees also purchasing a recreational property increased. The pandemic has spurred demand as retirees advance their plans to improve their quality of life by moving to cottage country, continues Royal LePage. Sixty-eight percent of regions reported an increase in retiree buyers compared to last year.
This is good news for the Hardwood industry as new owners may carry out renovation projects on their recreational property such as kitchen cabinets, flooring, and other projects, increasing the demand of Hardwoods.
