The year 2003 may well be regarded as one of consolidation for many American producers and exporters, when markets and prices stabilised and the chances of profitability improved. But some view the future with some trepidation as competition from European hardwoods increased and imported furniture threatens the business of many of their US domestic customers on which they depend for their core business.
Worldwide exports of American hardwood lumber and logs in 2003 grew in value by 4% and 9% respectively, whereas hardwood veneer shipments were static. According to data just released from the US Bureau of Census, volumes were slightly down but the value was up reflecting better prices – mainly towards the end of the year. Total exports of American lumber amounted to US$1.285bn with veneer adding another US$417m. The leading export lumber item globally was red oak, closely followed by white oak, together amounting to 42% of all sales value and 40% of volume.
With international demand for cherry and maple so strong it was not surprising to see increases in sales value of 12% and 2% respectively for lumber, and also higher sales of logs. But one phenomenon last year was the apparent increase in demand for walnut, for which the supply is limited. In fact, the volume dropped although the value held, indicating higher prices for the material available and the acceptance of some lower grade material. Demand for ash improved, thought mainly to be a response to higher oak prices. Western red alder shipments also increased significantly in both value and volume. Beech lumber sales increased 52% from a low base, perhaps on the increased profile of this species since the discovery of European beech by Asian markets in recent years. Yellow poplar/tulipwood sales held at a respectable value of US$90m representing 7% of all export sales worldwide.
Following the setbacks to Asian hardwood lumber markets and furniture export sales caused by SARS in early 2003, there appears to have been something of a recovery at the end of the year. The value of shipments of American hardwood lumber to south-east Asia was down by 14%, but to China was up by 2.3%. Given the falls in shipments earlier in 2003, the late improvement in Asia may indicate a returnto growth there. In Europe there was no change in the value of lumber shipments from 2002, although volume was down 4.5% indicating higher unit prices paid there. However, hardwood veneer exports were up 4.3% in value. Log shipments were also up, by 7.8% in volume. White oak lumber was basically unchanged but walnut was up 24%, tulipwood by 11% and western red alder by 9% on the previous year.
UK imports of American hardwood lumber imports were down 12% last year at US$65m. But there were star performers, notably white oak, with sales over US$25m. Second biggest seller was ash at US$8m, closely followed by hard maple and cherry. As elsewhere in export markets, strong demand for walnut was registered with logs, lumber and veneer all showing gains. Walnut lumber was up 28% to US$3.3m.
In Ireland, American hardwood lumber imports also slipped, by 3.5% to US$16m. But there were gains too. White oak was the best seller, but walnut lumber sales rose 72%. Ash lumber also showed real strength with a market gain of 15% reflecting renewed interest in that species, and perhaps in response to higher white oak prices. Cherry lumber advanced by 14%, but maple veneer grew by a spectacular factor of 9% to US$622,000.
American hardwoods continued to appeal increasingly to architects and designers in the UK and around Europe, resulting in some spectacular projects in recent times. For example, Renzo Piano’s Rome Auditorium in black cherry, Hopkins’ Haberdashers’ Hall and Ignacio Quemada Sáenz-Badillo’s wine cellar, both in white oak, have become iconic for American hardwoods. This reinforces in many ways the confidence that other specifiers have in the American hardwood forest industry’s record of sustainable forest management. Promotion to designers has been a pillar of the American Hardwood Export Council‘s marketing campaign for several years. Despite the lack of awareness and acceptance of the Sustainable Forestry Initiative and lack of sufficient certified material available in the market, there is nevertheless a continuing confidence in the use of these temperate grown species.
American hardwoods have also featured strongly in European flooring products although this market seems finally to have reached a plateau of demand, at least for the time being.
Furniture sector
In the furniture sector, oak continues its comeback, whereas maple and cherry may have run their current course. By contrast, ash is again on the up, following both the difficulty in finding oak and the increases in oak prices. Supply difficulties have caused problems in the first couple of months in 2004. As one Danish trader said recently: “It is easier to sell American hardwood right now than to buy it!”
Speaking in early March, one US exporter said that “Too much winter snow and now too much rain is reducing logging, so that it is unlikely that supply will ease soon”. He suggested that these temporary supply difficulties are underwriting prices rather than there being any real strength in demand. This raises the whole question of the health of the US domestic market, where furniture import penetration is reaching critical proportions, as in Europe. It is reported that in the last 30 months employees in the US furniture industry have declined by 34,000. Thus, as furniture production moves increasingly to Asian countries, American hardwood producers are readjusting their strategy and marketing.
Meanwhile the US government is now engaged in an anti-dumping investigation against Chinese bedroom furniture producers. The final outcome, for which many US traders are waiting with interest, is due shortly. All traders in American hardwood products will also be watching carefully the value of the US dollar against foreign currencies throughout this presidential election year.
