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.”