Several hardwood species have seen some downward lumber price movement since our Market Update several weeks ago. There usually is a “lull” in our regional markets during the mid-summer months (log yards usually start to reach capacity – especially if the weather cooperates with logging activities, and many mills shut down for a week or so for planned maintenance); also, the warm weather can have a detrimental effect on some of our hardwood species – particularly as logs sit in the hot sun in a log yard.
However, we may also be seeing the impact of international economic policies being played out, as the US is jockeying for position with China on a number of trade issues. Couple that with the insistence by China that certain log shipments of ours go through an expensive fumigation process before they are permitted to enter that country, and that is leading to a waning demand – especially for red oak and cherry – from our largest international customers.
Further insight from The Hardwood Weekly Review (July 27, 2018 issue) indicates that “there has been the rising level of concern about exports to China, and for good reason. New trade data shows lumber and log exports to China fell 9% and 45% in May, respectively.” Again, the talk of possible tariffs on our lumber and logs to China has certainly throttled China back on its previously heavy demand for our hardwoods. The positive news is that domestic demand has stayed strong for most hardwoods, and particularly black cherry in the Appalachian Region of the US.
As can be seen in the chart below, Ash prices have remained steady, though reports are that exports have fallen a little. Cherry (4/ 4 #1 Common Green) has remained steady, though kiln dried dimensions have taken a hit over the last several weeks because of the decrease in Chinese demand. However, domestic cherry sales remain solid, with orders reportedly plentiful and no significant price reductions. Hard maple demand is said to be slowing, however, lumber prices have seen an increase lately especially in the 4/4 #1 Common category. Soft maple took a recent slide but has remained steady recently, with reports that #1 and #2 Common grades are selling well. Red oak has seen another price decline, as the demand from China has chilled for the moment.