EXPORT MARKETS COOL, BUT STILL HIGHEST DEMAND SINCE 2018

Through the first 9 months of 2022, US hardwood lumber exports are up 6% by volume and 11% by value from 2021. This is slowdown on pace from earlier this year, but still the best export showing since 2018. Exports of all hardwood lumber species through September 2022 have totaled 2.7 million cubic meters, a value of $1.8 billion.

The big concern in export markets continues to be a lagging recovery in the Chinese market. US hardwood exports to China are limited by reduced demand from within the country as their housing and infrastructure development has cooled off considerably since 2018. Export volumes of US hardwood lumber to China increased compared to last year, but are still less than half of what they were pre-trade war China also continues to pursue a “Zero COVID Policy” that means city-wide lockdowns aren’t going anywhere anytime soon.

However, in spite of the reduced demand in China, US hardwood lumber exports have increased every year since 2020. Exports to China in 2022 were over

110,000m3 lower than in 2020, but overall exports grew by 394,000 m3 in that period. So to look at that another way, markets outside of China have grown by over 500,000m3 through September of this year compared to 2020. The export markets leading this growth have been Europe, Canada, Mexico, and smaller growth dispersed through SE Asia. Interestingly, Vietnam has declined in volume every year since 2019. There are many factors contributing to this decline, including supply chain issues, strict COVID lockdowns, and a heightened competition for labor with many manufacturers looking to relocate from China www.hmr.com

Strong demand for US hardwood products in traditionally developed markets like Europe, Mexico, and Canada are encouraging for the future of our industry. As we continue to promote underutilized species like red oak, maple, and hickory in these markets, we look to continue to drive new growth and appreciation for American hardwood products worldwide.

The HMR Demand Index (HDI) is a feature in HMR Executive® that illustrates monthly trends in reported demand from 10 major domestic markets for hardwood lumber. Components of the index are color coded with various shades of blue when demand is slow, they transition to gray when demand is fair, and then to light red and deep red when demand moves from good to strong.

Cabinets

Residential Flrg

Truck Trailer Flrg

Upholst. Furniture

Wood Furniture

Moulding/Millwork

Wood Components

Board Road

Pallets

Railroad Ties www.rta.org

Wood Tie Industry Continuing Education

The concept of creating an off-the-shelf Wood Ties 101 is a popular topic among wood tie producers focusing on educating their railroad customers. Corporate turnover is a real issue. Which means every 18-24 months, you probably have a new end user/railroad person to interact with. So, one better get used to training. The Railway Tie Association offers outreach and education events to help bridge some of those gaps, as we have been the advocate for the wood crosstie industry from tree to track for over 100 years.

Our premiere educational event is called the Tie Grading Seminar. This is a three day all-inclusive deep-dive into all things wood ties. We teach the students the alpha to omega of the wood tie supply chain, so they get impactful information both upstream and downstream from their respective roles but we instill the concept each individual has the ability to question the quality of a tie, and each individual is equally important in the transformation of a tie from tree to track. Wood species identification is explained and helpful tips presented to give the students insights into categorizing wood ties by species group. Tie defects are defined and full size ties shown to assist students in grading real ties for end-use. The culmination of these taught principles gives TGS students a direct line of sight and the ability to classify ties.

RTA’s key networking event is called the Member’s Only Field Trip and usually occurs mid-June. This event offers robust raw material to end-use real-world perspectives of the industry. The slate typically includes a sawmill trip, treating plant visit, and a rail yard stop, all-the-while offering informative programs and a fun activity or two. This level of engagement is fairly intimate as space is limited – long term business partnerships and friendships are created via participation in this event.

The largest event RTA puts on each year is called the Annual Symposium and Technical Conference which is in the Fall. The conference includes exhibits, technical sessions, fun activities, and attendees garner a comprehensive scope of the pulse of the industry by attending. With all these events, our goal is to provide the platform for our industry to learn and grow through establishing a sense of community and providing continuing education for any individual, from new entrants to tenured personnel, there is appropriate context for all.

The Railway Tie Association membership works together to keep wood tie markets strong and sustainable.

WHAT IS YOUR VIEW OF CROSSTIE COMPETITIVE POSITION RELATIVE TO OTHER HARDWOOD PRODUCTS?

REGARDING YOUR ABOVE ANSWER, PLEASE PROVIDE CONTEXT FOR MARKET, WEATHER OR OTHER CONDITIONS.

Eastern Us

LAKE

States

Minnesota, Iowa, Wisconsin, Michigan, N Indiana, N Illinois: Log prices are starting to come down, but mills are still keeping a low log inventory. Some Amish mills that would normally start sawing after crop harvest are still sitting on their hands. Mild weather has been good for logging.

Atlantic

Virginia: Markets for pallet and flooring are dropping considerably. Mills are starting to cut more ties. Weather has been fairly dry for the past month and good conditions for logging.

North & South Carolina: Lumber markets are soft and over produced

West Virginia: Lumber pirces continue to drop. Some mills are low on logs for this time of year of heading into winter. Some of that is by choice because of dropping prices and sales orders.

New England

New England 1: With the markets up in the air, mills are looking for consistency and looking toward increased production of industrial products. Getting harder for mills to move their lumber. Red oak lumber is much lower that it was. Ties and pallet demand is still high, and mills are increasing production fo that material. Wet weather and hunting season will slow logging production.

Pennsylvania: Weather has been wet and not good for logging. Competing markets have softened somewhat.