HARDWOOD MARKETS MATTER

Hardwood Markets Matter and it is important for NHLA to share market details of the entire Hardwood Industry. We appreciate the support of allied associations and publishers in gathering and sharing this important market information that can help you understand the complete hardwood industry picture.

U.S. exports of hardwood lumber fell 19.0% in the third quarter, second only in the last five years to Q3 2018’s drop of 19.6%. However, second-quarter volumes in 2018 were hyper-inflated by last-minute shipments—and lastminute Chinese purchasing—ahead of the start of the trade war. Peak shipments are usually in the second quarter, so third-quarter shipments generally fall off. While third-quarter export volumes this year were certainly not awful—in fact, they were higher than in 2019 and 2020— absent the 2018 anomaly, this year’s third-quarter slowing was the worst in 33 years, in terms of percentage decline, and the worst ever by volume.

Importantly, exports to Latin American markets (namely Mexico) held up significantly better in the third quarter than shipments to Canada, Asia and Europe. Third-quarter shipments were down 8% to Mexico, but up a combined 11% to smaller secondary Latin American markets. By comparison, third-quarter volumes dropped 20% to Asia (including 26% to China), 27% to Europe, and 26% to Canada.

Likewise, third-quarter declines varied widely by species. Somewhat surprisingly, Red Oak exports held up best in the third quarter, dropping only 8%, overall, and actually rising 16% to Latin America. In contrast, White Oak, Walnut and Hard Maple exports fell off about 25%, and Alder and Soft Maple exports dropped 30% and 40%, respectively. www.ahec.org

While strong U.S. domestic demand played a significant role in the market price runup that began in the fall of 2020, exports also contributed, with volumes climbing slowly and steadily from the pandemic lows of early 2020 through the first half of this year. Certainly, exports are not as significant in terms of overall demand for U.S. hardwoods as before the trade war, but the sharp drop-off in third-quarter volumes this year clearly has contributed to the rapid price declines we’ve seen since July.