Overseas Markets Are Spotty And Pine Is A Best-Seller
By Sue Putnam
Editor
Exporters and those selling domestically from the Southeast report a variety of issues from market peculiarities to a lack of urgency from buyers and trucking.
While a Louisiana-based lumber representative said his company doesn’t sell softwood domestically, they exported their “Pine products to 74 different countries last year — everywhere from East Asia to Central and South America.” As to how those international markets are faring at the time of this writing, he replied, “It’s a mix. Some of the markets are embroiled in tariff issues and some of them are experiencing logistics issues, so it’s very spotty. The performance for those markets is very uneven but overall, sales are about on par with six months to a year ago.”
“98 percent” of their inventory consists of Southern Yellow Pine, which is their best seller, he said. “We work with a tiny amount of Eastern White Pine and Douglas Fir from North America. We do pretty much everything such as SAPs, prime, merch and No. 2 and No. 3 Common because we’re in so many different markets. We also buy C & Better down to the little two-foot trims.”
His customers consist of end users and “there are a lot of distributors. When we have that many clients in that vast of an area, it’s a big mix and we’re typically not selling a lot to foreign wholesalers through brokers.” He shared that his customers have divulged their concerns about the tariff situation and he had to inform his team in Asia that the federal judge blocking the tariffs “wasn’t the end of the deal and is just one step in the legal process.”
He was very interested in the difference in the effects the tariff issues have had on the softwood versus the hardwood markets. “It’s interesting when we look at Vietnam because there’s a little microcosm there and we saw sales plummet 90 percent in species like poplar and ash but then softwood sales, specifically for Pine, increased in that market during that same period, which is bizarre.”
He commented that “some lanes,” regarding transportation, “are moving slowly while the prices have come down 15 to 20 percent for others. It just depends on where people are going.”
He shifted his focus to a “bigger issue,” which is international container businesses. “We’re seeing blank sailings, lack of availability and bookings rolled four or five times,” he noted.
One lumber salesman in Louisiana reported that the overseas lumber markets are very odd.
When asked about any hope he has for the future of the industry, he replied, “I think that some items are just overproduced and that is causing pricing challenges, but the market will almost certainly remain unstable for some time until we see some relief on interest rates and until housing starts go back up. Offshore demand is just spotty. Some markets are over-performing, and many are under-performing. It’s very odd.”
One lumber salesman in Mississippi believes that the economy is “taking a breather.” According to him, the market, which is worse than six months ago, is “slowing down and is average at best. There’s a lot of production out there, so that’s something we’re dealing with — there’s no real urgency for people building inventory on the customer side of things. Uncertainty in the economy and interest rates are still having an impact. Tariffs, however, are not having as much of an effect because no one knows what’s going to happen. Until something is definitive, nobody is really going to know what that’s going to impact.”
They only sell Southern Yellow Pine, offering it in “anything from 5/4 radius edge decking to large timbers. It is all just Standard grades. In 5/4, it is anything from No. 4 Common to Premium. Some Select products are on a custom basis. Right now, the big timbers are probably selling better than anything else and the grades for it are 90 percent No. 2 Common or No. 2 Common & Better.”
Industrial customers and treaters are their customers. They also do some exporting.
When asked whether his customers or he had any thoughts on the future of the market, he said, “I wouldn’t say we’re pessimistic about the future of the market but at the same time, there are several details, and we will need to see how they play out to determine what direction the market is going to take. I don’t really see any significant upturn for the next quarter.”
At the time of this writing, he said, “Trucking has been an issue for the last 45 days or so and it is probably due to a lack of available equipment. Plus, I think other sectors are doing more. This time of year, we start getting products like steel or produce that are more time sensitive and so they generally pay more money.”
In Alabama, “it’s been pretty good,” stated one lumber source who also shared that it is better than six months ago due to the “change in the seasons and overall pick-up in business. Typically, in our area, once it isn’t as cold, we tend to see better months.”
For their softwood products, which include Southern Yellow Pine, Spruce, Cedar and Cypress, they offer grades and thicknesses such as 1-inch, 2-inch, No. 2 Common and D and C Select. Southern Yellow Pine is their best seller.
They don’t export and sell to retail lumberyards.
He said that his business “doesn’t have any feelings about the tariff situation and we are sitting and waiting because we can’t really control that.” He is also “looking forward to continued business.”
