For those of you involved in the consumption of industrial lumber, 2013 was a year to remember!
The year started with a very mild winter and fairly stable supplies. Inventories of lumber were not outstanding, but neither was demand. Things were pretty much in balance.
In the softwood markets, pricing increased and decreased dramatically throughout 2013 as foreign buyers entered and exited the markets. In the hardwood markets, pressure from a variety of markets kept inventories low and prices on the rise.
Softwood Market in US
Let’s take a look at the Southeast as an example.
As remodeling projects remain strong and new housing starts continue to improve, what will 2014 look like? Will production be able to increase to meet additional demand? Will foreign buyers continue to drive up prices in North America? Time will certainly tell, but one study suggested that lumber prices would be 30% higher in 2014 than in 2013.
Hardwood Market in US
The industrial hardwood markets faced difficult challenges in 2013.
The primary supply-side issues being faced by the hardwood industry are the lack of loggers and the closure of many hardwood sawmills. In Virginia alone, the number of sawmills has been reduced by more than 50% in the last two decades.
So what will it take to improve the hardwood supply and stabilize pricing? Perhaps the conversion to the use of more softwood in industrial markets is not just a short-term trend, but is here to stay.
What do you think? Are the 2013 lumber trends here to stay? What do you think we can expect from 2014? Let us know your thoughts by commenting below.
Post by: Rich Reiher, Vice President of Sales
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