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Highlights of the Appalachian Hardwood Timber Markets – First Quarter 2017

It’s been another interesting start to a new year for hardwood demand in the Appalachian Region of the US.  Despite a generally sloppy winter, log supplies were usually adequate throughout the overall region, with “excellent” supplies available in the southwestern part of Appalachia, and general supply tightening as you go northeast through Indiana, Ohio, Pennsylvania and New York.  Privately-owned timber sales in Pennsylvania and New York have increased, due to needed supply as well as the continued solid domestic demand and increasing international demand for hardwood species.

Ash lumber has seen a significant increase during this first quarter.  Despite the continued harvesting of ash to stay ahead of the Emerald Ash Borer infestation problem, this species has maintained a very robust demand, with significant volumes being shipped overseas.  As with many other species, China is an instrumental player in export demand, and kiln dried ash lumber has especially been in high demand recently.  Some reports show that hard maple lumber demand is starting to see an uptick due to low supply and tightening prices, while others report that upper grade material had seen a fall in price initially in January, then a steadying off through the first quarter.  The substantial rise in soft maple that had been witnessed through the fourth quarter of 2016 through the first part of January of this year dipped a bit in February but has steadied itself through the end of March.  Red oak demand has also come down from the first of the year, but has steadied as well in February with recent reports stating that demand for most grades of red oak continues to be “good.”

And we’ve saved the most interesting news for last – we’ve been noticing upticks in the pricing of cherry lumber since the end of January, with significant increases starting at the beginning of March.  Over this past month, the beginning of a renewed optimism is hitting the major pricing reports, with one reporting service (Hardwood Review) stating that “significant improvements are happening in cherry markets, according to multiple contacts.  Our cherry sales, which are mostly to China, have been very strong and prices are up.”  Another producer said that “cherry is hot and we can’t make enough.”  Because of the lack of inventory due to the long-standing lull in the cherry market over the years, this new uptick in demand is making it hard for some mills to get adequate supply quick enough to cover the current demand increase.  Another good sign for cherry is the report that Chinese buyers are anticipating strong lumber demand through 2017, for not only black cherry but other species as well.

General market comments/trends in the Appalachian Hardwoods region (last 3 months):

Black cherry: international (Chinese, other) demand increasing; domestic demand starting to improve; stumpage prices still flat but expect to see increases as lumber demand increases; lumber prices + 9.5%!

Hard (sugar) maple: slight decrease then steadying of both export and domestic demand; stumpage prices down slightly; lumber prices –2.5%

Red oak; export and domestic demand slightly decreasing since the beginning of 2017, but now steady; stumpage prices steady; lumber prices -3.1%

White ash; export and domestic demand remains robust, and Chinese demand remains very strong; stumpage prices steady at high levels; lumber prices +6.1%

Soft maple; demand tailed off slightly in mid-Feb, then steady since; stumpage prices decreasing slightly; lumber prices -1.2%. Soft maple is still outpacing hard maple in lumber prices.

 

Perspective and % Changes are measured from January 6, 2017to March 31, 2017 data