The market for Softwood lumber in the Southeast is strong, based on interviews with lumbermen.
A spokesman for a Louisiana lumber company said, “Our sales for December were the biggest I remember since I’ve been here. Our January was also a solid sales month. From a product supply standpoint, we sell half-and-half commodity lumber and non-commodity lumber. The commodity lumber became very tight about Dec. 15. It appreciated in price for about 30 days. We saw it start to loosen up in January, and more product became available. At this point, prices are falling like a stone. On the rough side, it’s quite price stable. Overall, I would say our market is pretty strong, very much like the previous year. Between changing the structure of our company and the health of the market itself, we’re in a good spot.
“There was a massive downward spiral in prices in September,” he said. “We did see large volumes of sales but from a dollar value, it’s not the same amount of cash. Our month-over-month performance for the past 12 months has been about the same.”
This lumberman, in his division at his company, sells 98 percent Southern Yellow Pine. He sells a little Doug Fir and Hem Fir.
He sells to both distribution yards and end users. The success of his customers varies by region of the world. “Most people say their business is doing OK,” he noted. “No customer is struggling or going out of business.”
In the area of transportation, domestic trucking is a little better, he observed. “It’s OK. Exporting in containers is a major problem. Prices have appreciated and you’ll make a booking and it may get rolled two, three or four times. Or you’ll have a booking and that shipping line decides to drop that service mysteriously. And you can’t find another shipping line with service into whatever region of the world those goods were supposed to ship.”
A Mississippi lumber source said his market is good. “It’s strong,” he reported. “It continues to be surprisingly strong. Our business has had zero letup through the holidays, winter and COVID. Almost every month our business is setting a new volume of shipments record. That’s been the case for well over a year.
“We sell primarily low-grade Pine and hardwood,” he stated. “Pine prices have gone up dramatically since COVID hit. We continue to be surprised that our customers are not repelled by higher prices. There is not enough production to meet demand.”
Not surprisingly, he rates his market as better than it was six months earlier.
“Pine is the only Softwood we purchase on a regular basis,” he observed. “We buy it in No. 2 and Better and No. 2 common to MSR and No. 3 and No. 4.”
He sells to both retail and industrial users. He said his customers are stronger than a year ago. COVID affected manufacturing so that it was not up to 100 percent production, he said. There has not been full production in well over a year. Supply and demand have been so out of balance that customers are willing to wait for product.
Unlike most companies, he said transportation was not a problem. “We have a huge network of trucks,” he stated. “We get freight moved pretty quickly, but it is expensive.”
A lumber provider in Alabama said his market is “very strong, across the board.” Even at that, he said his market is weaker than it was a few months ago. “We’re into multi-family housing and we take contracts to build these apartments. We’re locked into our price on these contracts regardless of what the market does. Reload space being almost non-existent, you’re just at the mercy of the market whatever it does if you can’t secure the material and get it in a holding facility. We need storage to buy lumber at lower prices.”
He handles mostly No. 2, No. 2 and Better and a little No. 3 in SPF and Southern Yellow Pine.
He sells to contract builders. “The market is extremely busy for them,” he noted. Two problems, he said, are transportation and storage shortage. “The rates we have to pay for trucks have tripled and quadrupled,” he stated.
