July - September, 2012
Fourth Quarter Hardwood Price Increase Expected
By: Andy Johnson
During the first eight months of 2012, brisk industrial lumber shipments, rising flooring-grade lumber sales and record exports to the Far East helped many North American hardwood sawmills get back into the black. Relatively tight log supplies, limited access to capital, and a growing aversion to sawing unprofitable items kept mills from overproducing markets, as often occurred during past upturns. Consequently, green and kiln-dried lumber prices were unusually stable well into the summer.
With kilns turning quickly and exports seasonally slow, prices for some items are now under downward pressure. However, we expect only minor price decreases before hardwood lumber supply and demand are again balanced, probably by the end of October.
If exports to Asia stay at record levels, domestic demand gradually expands, and lumber production stays at or near the current level-as we are forecasting-then spot shortages are likely by December. Green sawmills should have very little trouble moving lumber at steady to somewhat higher prices in the fourth quarter.
Despite the challenges of the day, domestic and international markets will offer hardwood producers plenty of business opportunities through year-end. There are still three full months left in 2012, and we expect them to be fairly good ones.