Demand for timber and wood products in the US is healthy and getting better, but the sectors of the market are still in over-supply and achieving low margins.
That’s the summary of the latest outlook article in the US Wood Markets Monthly report.
It says that US economic indicators range from good to very good. Low interest and mortgage rates are maintaining annual repair and refurbishment market growth at 5.5%, while housing starts are expected to hit about 1.7 million, equal to last year’s figure.
But Wood Markets says that, in key areas, the North American industry overall continues to “squander strong demand fundamentals” thanks to “too much output and imports chasing a market that is simply not large enough to consume all the product”.
Softwood lumber prices are “at their lowest since the 1991 recession”, with the market glut due to over-capacity and cheap imports. Low inventories have recently helped lift prices to break even, but the recovery is expected to be shortlived.
Softwood plywood is said to be losing out to lower priced OSB and particleboard and softwood mouldings are also suffering from excess production.
On a brighter note MDF, joinery and engineered wood products are reported to be faring better. OSB is doing best of all with prices up 60% on last winter’s lows. “OSB continues to gain market share from sheathing plywood and the industry’s ability to manage capacity is paying off,” said Wood Markets.
