Import/Export Wood Purchasing News - December 2023/January 2024

WEST COAST BUSINESS TRENDS - Continued from page 29
and a lot of it is coming in by train and into the port. It’s still difficult to get it
from the port.”
He continued, “The off-gassing of the diesel fuel and the fumes don’t meet
the criteria set forth by legislation here. Until the trucking companies can get a
handle on that end of it, our prices will be higher just to move it in.”
Overall many hardwood suppliers in the area expect market activity to remain
stable but look for price increases and availability shortages to continue. n
ONTARIO BUSINESS TRENDS - Continued from page 19
being produced, it has temporarily eased price volatility.
With orders for finished goods being low, many secondary manufacturers
have reduced their operating hours, thus using less lumber and raw materials.
Purchases, say some contacts, are for replacement needs only. Kiln-dried Birch
sales are hard to come by, and prices are sliding down. Mills and wholesalers are
shipping their limited quantities of green stocks, however, they noted competition
is fierce for orders. Sales are for premium color material with prices stable.
There was a slight improvement in demand for Hard Maple, although secondary
manufacturers and lumber wholesalers indicated sales of finished goods were
not that good. Purchases were made to replenish depleted stocks, as buyers saw
a tightening of supply availability. Inventories are still noted as low, with prices
continuing to rise for some grades and thicknesses. Green Hard Maple production
is low, with some areas struggling to source logs because of inclement weather
and weak markets. Secondary manufacturers and wholesalers are working to
increase their receipts.
Soft Maple sales are now more closely aligned with buyers’ needs. Prices have
stabilized, and are now edging higher. "We saw demand for kiln-dried inventories
shift from an excess on markets to hardly available supplies, which resulted in
firmer pricing for this species," said one source.
Red Oak demand remains at a fair pace as it is used in finished goods, in repair
and remodelling projects, for solid wood flooring and for railway ties. Kiln-dried
demand is outpacing supplies, which raises prices for most grades. End users are
absorbing green Red Oak at this time, and supply is not sufficient to meet this
demand.
On the other hand, White Oak is in great demand at this time both on domestic
and international markets for high-end finished goods. However, the issue is
finding logs to supply this need. Prices are rising as a result of this shortage. Most
kiln-dried inventories for White Oak are thin for most items.
In early October, the Honourable Filomena Tassi, Minister responsible for the
Federal Economic Development Agency for Southern Ontario (FedDev Ontario),
the Honourable Bardish Chagger, Member of Parliament for Waterloo,
participated in the Wood Manufacturing Cluster of Ontario (WMCO)’s Quarterly
Networking Event. MP Chagger announced almost $2.9 million in support for the
organization so they can help SMEs (small and midsize enterprises) in southern
Ontario adopt digital strategies.
The announcement notes Ontario is home to the largest concentration of
advanced wood manufacturing in Canada, and the forest industry is a pillar of
the Canadian economy. It has over 3,000 companies employing 35,000 workers
who contribute more than $7 billion in revenue each year. The Government of
Canada supports these workers and the manufacturers that employ them as they
evolve, scale up, adopt new processes and technologies, increase their production
capabilities and create good jobs for Canadians.
WMCO is an industry-led cluster that supports SMEs across southern Ontario
specialized in cabinetry, commercial fixtures and millwork, furniture, flooring,
mass timber construction and other niche products. With this investment, WMCO
will support manufacturers as they adopt technologies, including supply chain
digitization and increased Internet-of-Things capabilities.
WMCO will provide seed funding for up to 50 eligible SMEs undergoing
digital adoption projects, creating 50 new jobs. As part of this investment, 50
new products, services and processes will be commercialized. WMCO will also
prioritize SMEs in rural and Indigenous communities through targeted outreach
activities.
The Government of Canada is investing in manufacturers so they can reach
their potential and develop new possibilities for this important industry.
We wish everyone a very Merry Christmas, and a happy, healthy and prosperous
New Year! n
QUEBEC BUSINESS TRENDS - Continued from page 19
pressuring green lumber prices.
Flooring plants are holding back buying Hickory, and some wholesalers are
also reducing orders of this species. Kiln-dried business is flat mostly everywhere
at present for Hickory.
Certain residential wood flooring manufacturers are more cautious in purchasing
Red Oak and are lowering prices accordingly. Business is reported as not
being strong for Red Oak; supplies are thin due to its low production this year.
Kiln-dried prices gained traction over the past few months with figures being
raised accordingly. Drying operations were purchasing No. 1 Common and Better
Red Oak, as they do not have much in drying yards or kilns. Certain residential
wood flooring manufacturers said they were taking a cautious approach to Red
Oak buying and lowering their prices.
Contacts noted strong demand for White Oak for green No. 1 Common and
Better, due to low production. Prices are rising for certain grades and thicknesses,
and demand on domestic markets are quite good, while exports are fair for certain
businesses.
Demand for Poplar is reportedly decent while prices for Common grades have
tightened in certain areas.
Markets for Walnut are not that strong, except for the U.S. and to China; production
has been low for the past several months.
Furniture producers are experiencing slow business while supplies are ample
for raw materials and framestock. Wood pallet markets are also slow while others
note steady sales.
According to Canada Mortgage and Housing Corporation (CMHC) housing
supply across Canada’s largest cities saw just a 1 percent growth in the first six
months of 2023, compared to the first half of 2022. CMHC’s latest Housing
Supply Report examines new housing construction trends in Canada’s six largest
Census Metropolitan Areas (CMAs). These are Calgary, Vancouver, Edmonton,
Toronto, Ottawa and Montreal. Tighter borrowing conditions, elevated construction
and labor costs, and high interest rates created challenging conditions for
homebuilders across all six major markets. Additionally, construction timelines
saw a slight increase from the first half of 2022, up 0.9 months.
Toronto and Vancouver accounted for nearly two-thirds of the housing starts
across the six markets, with apartment starts making up nearly three-quarters of
all housing construction. The strong apartment growth observed in Toronto and
Vancouver was offset by declines in Canada’s other largest centers.
Montreal tends to build more small and low-rise apartment structures than Toronto
and Vancouver. Because of their smaller size, these structures take less time
to plan and build. The decline in housing starts in Montreal was, therefore, more
reflective of the recent deterioration in financial conditions.
Elevated rates of apartment construction, highlights the report, are not likely
to be sustainable due to various challenges facing developers. These challenges
include higher construction costs and higher interest rates.
This cutback takes place at a time when more sellers are coming to market.
New listings have increased in each of the last six months, and in September surpassed
their pre-pandemic level by 10 percent (this data is the most current data
available at press time).
The Royal Bank of Canada’s Monthly Housing Market Update notes that early
evidence in September confirmed that higher interest rates continue to restrain
real estate activity across most of the country – with Alberta once again bucking
the trend with its sustained vigour. Home resales fell 1.9 percent month-overmonth
(m/m) nationwide, marking the third consecutive monthly decline.
A sharp easing of supply-demand conditions since summer has brought most
markets into better balance while tipping Ontario into a buyer’s market. This has
relieved the upward pricing pressure that built in the spring. Canada’s aggregate
MLS Home Price Index fell slightly month-over-month in September (-0.3
percent) for the first time since March. Prices are expected to soften further
through the remainder of this year and possibly into early next as market conditions
continue to tilt in favor of buyers.
Sales declines were widespread in September with few markets reporting advances.
Among Canada’s larger markets, the pullback was sharpest in Vancouver
(-5.6 percent m/m). Though the latest backstep in Toronto looked comparatively
modest at -1.8 percent, the fall since this spring’s peak is substantially more pronounced
-22.4 percent than in Vancouver (-13.7 percent).
Higher interest rates, affordability challenges and economic uncertainty are likely
to keep homebuyer demand muted in the near term. At the same time, higher
interest costs may also exert increasing pressure on existing homeowners to sell,
keeping the flow of new listings going. Together these trends would hand buyers
more pricing power in the months ahead, driving prices further down in Ontario
while restraining gains elsewhere in the country.
With housing markets down, it will mean less consumer spending on many
hardwood finished goods as consumers reign in their spending as interest rates
are higher and with the economic uncertainty.
We extend the hardwood industry sincerest best wishes for a happy, healthy
and prosperous Holiday Season. n
BUSINESS TRENDS ABROAD - Continued from page 21
billion, year-on-year down by 29 percent; wood-based panels and flooring $371.8
million, down 36 percent and wooden doors $16.8 million, down 32 percent.
Ghana - Ghana is set to become the first African country and second in the
world to begin issuing licenses for timber exports under the Forest Law Enforcement,
Governance and Trade (FLEGT) scheme.
This follows the successful assessment of timber marking and tracking processes
in the Bobiri Forest Reserve in the Ashanti region by a European Union
and Ghana Forestry Commission team.
The FLEGT scheme forms part of measures the Forestry Commission has
instituted in compliance with tree harvesting regulations, including traceability at
origin in line with the European Union’s Voluntary Partnership Agreement was
signed between both countries in November 2019.
In 2022, the Minister for Lands and Natural Resources (MLNR), Samuel A.
Jinapor, hosted the European Union Ambassador to Ghana, HE Ichard Razaaly.
The MLNR Minister discussed key actions undertaken by government in preparation
for the issuance of FLEGT licenses. He also acknowledged the importance
of Ghana government collaborating with EU to realize the full benefits of
the timber industry.
Italy – According to published reports, it is evident that the decreases in
demand for furniture has corresponded to a decline in wood production as well.
Wood revenues have increased significantly in the past two years due to rising
raw material and energy costs. Therefore, the decrease in revenue can partly be
attributed to the positive recovery in commodity prices.
“If the significant decline in wood revenue can be partially attributed to the
slowing growth of raw materials and energy cost, in contrast to 2022 compared
to 2021, the data on furniture production is different, primarily indicating a
slowdown in demand and the export of our products, even overseas,” said Claudio
Feltrin, president of FederlegnoArredo. “Clearly, these two factors also impact
the wood sector, which is beginning to feel the effects of reduced production
in the 2022 demand, a year with above average performance, has been meant.”
The wood macrosystem is the most significant contributor to the overall decline,
according to FederlegnoArredo Study Center, contracting by -12.6 percent
(with national sales down by -14 percent and exports down by -8.3 percent), despite
widely varying trends among different segments, from panels experiencing
CLARK LUMBER COMPANY
• 6 sawmills producing 48,000,000’ of Appalachian Hardwoods 4/4 - 8/4
• 900,000’ drying capacity
552 Public Well Road • Red Boiling Springs, TN 37150
Office: (615) 699-3497
• 2,500,000’ kiln dried Lumber Inventory
• Species: Red & White Oak, Hard & Soft Maple, Poplar, Ash, Cherry, Hickory,
Walnut and Aromatic Red Cedar
• Export prep & container loading
• A team of over 130 employees manufacturing Appalachian Hardwoods
significant contraction to wooden coverings, structures, and buildings showing
growth.
Looking ahead to the end of 2023, the assessment predicts a negative year-end
for the wood sector at -3.3 percent, with exports at -2.6 percent and the domestic
market at -3.8 percent.
Regarding the furniture macrosystem, forecasts suggest a slightly positive
overall trend (+0.2 percent) thanks to stronger domestic market performance
(+1.3 percent) compared to exports (-0.7). Conversely, the wood macrosystem is
expected to experience a negative trend (-8.5 percent overall) with little difference
between the domestic market (-8.6 percent) and exports (-8.3 percent).
United Kingdom - The import value of tropical wood and wooden furniture
into the UK in the first eight months of this year was $655 million, or 38 percent
less than the same period last year. In quantity terms, the UK imported 273,400
tons of tropical wood and wooden furniture in the January to August period,
according to most recent data, which is 9 percent less than the same period last
year.
This low figure in tonnage terms is the lowest level of UK tropical wood products
imports for the first eight months of the year since at least the early 1990s.
It is 4 percent below the previous record low, which came in the first eight
months of 2013 at the end of one of the longest periods of economic stagnation
on record in the UK.
It is also 5 percent less than recorded in the first eight months of 2020 when
the country was at a complete standstill at the start of the COVID pandemic.
Coming as it does after two historically good years for the UK trade in 2021
and 2022 during the immediate post-COVID recovery, this is a case of boom and
bust.
The monthly data shows that the total tonnage of UK imports of tropical wood
and wooden furniture fell to an extreme low of only 22,000 tons in December
2022 before rising to 35,000 tons in February 2023.
Since then, imports have barely shifted from this level, which is about 20
percent below the long-term average for the time of year. n
Jeff Thomas, Mill Manager, Clark Lumber Company, Lafayette, TN; Jeff
Shoulders, Procurement Manager, Joseph Draper, Sales, Brandon Clark,
Vice President, Hugh Clark, President, Tony Presley, Kiln Operator,
Parrish Wright, Log Procurement/Logistics, Scotty Dyer, Yard Foreman,
Clark Lumber Company, Red Boiling Springs, TN
“From our Forest to your Facility”
Brandon Clark
bclark@clarklumbercompany.com
Joseph Draper
jdraper@clarklumbercompany.com
www.clarklumbercompany.com
Page 30 Import/Export Wood Purchasing News n December 2023/January 2024
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