US Lake States woodfiber inventories are filling

Lake States woodfiber markets depressurized during first quarter of 2023

Lake States woodfiber markets depressurized during first quarter with several consuming mills taking maintenance/repair/upgrade downtime or slowing production with weakening markets in paper and building materials. Logging conditions were reported to be ‘adequate to good’ through the period after a challenging fourth quarter.

Woodfiber prices were down in almost all categories from last quarter. Consumers bought less incremental long-distance volumes, while fuel prices (and attendant bonuses) went down. Inventories were reported strong across most markets as spring breakup and road restrictions kicked in.

A Michigan consumer said, “I’ve got wood coming out of my ears, where last year we were beating the bushes for every stick we could find. Now, competitors are taking market downtime and pushing roundwood away.”

Said a supplier in Wisconsin, “The uncertainty in the economy has triggered a lot of market downtime around here. Woodyards are full.”

Most woodfiber prices fell from fourth quarter to the end of first quarter with eased competition, lower fuel prices, and good logging conditions. Consumers broadly reported strong inventories going into spring breakup.

Optimism in the wood market field

The mood around the Lake States wood market was decidedly more relaxed at the end of first quarter than it had been for a while. Despite end-market softness, wood buyers were happy to see ample wood piled down and price moderation.

During the fourth quarter, a Wisconsin source said, “There was a lot of panic, especially with one consumer reaching into other wood baskets. But logging capacity kept up” and mills started taking downtime or slowing. He added that remote woodyards were shut down as volumes became easier to find.

A Wisconsin logger said, “Pulpwood demand is soft. Mills have low orders. It’s been a challenging winter with warm temperatures and rain. Not much frost is in the ground.”

“We had a very productive winter,” a Michigan consumer said. “We filled quick and had some market issues, so slowed down. We’re shutting some suppliers off, even with road restrictions coming on. We have plenty of wood to get us through the end of April.”

In Minnesota, a contact said that rain earlier in the winter made a mess; however, a February freeze allowed access to spruce in the swamps. “Now inventory is right on track,” he added. “Mills are filling on hardwood and we are slowing with soft paper markets. I am pleasantly surprised with deliveries.”

What to read next
You can now try a free sample of our popular North American wood products newsletter
The linerboarprice drops are a result of discount deals emerging in the North American linerboard market
Given the recent mill curtailments some hardwood producers are thinking creatively in order to stay productive
Multifamily housing starts show some sign of life in late 2023, but the overall picture shows a different trend when compared to single-family
Overseas hardwood trade has seen a global-wide downward trend, in addition to reduced domestic demand in the US
Despite slower population growth and lower household formation rates, there remains a shortfall in the housing market, particularly for starter homes in North America