The US hardwood market: the Appalachians
This is the second article on the US hardwood market,focusing on the Appalachians sub-region. The Appalachians are commercially the most productive hardwood region in the USA. Valuable species in the Appalachians include cherry, oak (red and white), maple
(hard and soft), birch and walnut. The overall market conditions for Appalachian hardwoods are fairly stable. However, each wood species is subject to special circumstances.
Red oak demand subdued
Prices for green red oak are on a general downward trend. Prices of kiln-dried red oak lumber are still stable but may also experience some weakness in the months to come. As a result, many sawnmills are now curtailing the production of this species in favour of the more lucrative cherry and maple woods.
Demand for white oak depends on grade
Market conditions for white oak vary depending on the grade. Demand for upper grades is vivid and prices are moving forward. On the other hand, demand for lower grades is less buoyant and prices are falling.
Cherry bullish, hard maple demand strong
Cherry is a very popular species in the furniture, cabinet,flooring and millwork industry. However, inventories of the lower grades and of the most common thicknesses have been growing and can now be sold only at discount prices.
The appearance of hard maple is of great appeal to US buyers of cabinets and many other wooden end-use products. Due to the great popularity of this species and the associated lucrative profit margins, sawmills raised production levels resulting in an oversupply of hard maple and softening of prices.
Soft maple: firm demand and abundant supply
Although demand for soft maple remains solid, the supply of this wood is also presently abundant. Upper grades and thicker lumber have been less affected by the price weakness.
Birch under pressure
Current business conditions for birch are difficult while supply is ample. Competition from imported lumber,
wooden parts and finished goods is hurting US birch producers.
Poplar popular in Asian markets
Poplar is an important species in the Appalachian region and current market conditions are solid for all grades. In comparison to many other hardwoods, poplar remains a very economical choice and current prices are still acceptable even to the price-conscious Asian buyers.
Balanced supply-demand for walnut
Log and lumber inventories of walnut are currently adequate as production for most items is keeping pace with orders. Supply and demand for the upper quality grades are in balance and prices are stable. This is different for the common grades where the demand from hardwood flooring manufacturers is exceeding the supply.
US housing starts hit second highest level
New housing starts reached 2.065 million units in 2005, up almost 6% from 2004 and the first time to hit 2 million units since 1978. US new housing starts have exceeded the 1.5 million units level for eight straight years since 1998. Detached units, in particular, rose 6.4%
to over 1.71 million units, a new record. The ratio of detached units over total housing starts continued to increase, reaching 83% in 2005. The increase of detached units continues to stimulate the demand for lumber and structural panel considerably, now probably the largest in record.
US Imported Sawnwood Prices
*Dimension lumber; **Rough lumber
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