In the process of visiting the timber market, the reporter learned that even though the reason for the rise in timber prices in North America is due to the "peak season" factor, it is more driven by the disorderly rise in the prices of upstream raw materials.
Some market participants said that since the beginning of this year, affected by the epidemic, the operating rate of local wood processing plants in the United States has been seriously insufficient. So far, the resumption rate has been less than 50%, the production capacity is seriously insufficient, and the supply price of raw materials has continued to rise. On the "Golden Nine Silver Ten", the shipment volume of North American timber has improved, the domestic market inventory has gradually been depleted, and the shortage of supply has become more and more obvious, which in turn has pushed up the price of the North American timber terminal market.
However, the rising prices have made North American timber "high and cold". When its price is much higher than its value, the attitude of many domestic dealers towards North American timber is surprisingly consistent, that is, fewer purchases They don't even buy goods, relying on inventory support. When the inventory is exhausted, they will buy some goods and sell them back.
Some merchants reported that driven by the peak season, although the volume of goods in the North American material market has slightly improved compared with before, it was difficult to meet expectations and the overall market demand was still cold. In addition, ash, red oak, and other mainstream wood species are highly substitutable, and European ash, Russian ash, oak, etc. can be substituted. Their seriously high prices directly lead downstream manufacturers to switch to European ash. and other species, which will undoubtedly further affect the market demand for ash and red oak.
"At present, the price of North American materials is too high, and it is not worth the price at all, and the demand from downstream factories is also low, and sales cannot be recovered at all. For the sake of insurance, merchants mainly consume inventory and occasionally take a little bit selectively For example, choose some materials with relatively cheap prices and relatively low risks." Some merchants reported, "At present, we do not dare to do a large amount of inventory, because once the upstream production capacity comes up, the price of North American materials will probably increase. A sharp decline is too risky.”
As for the next market trend of the North American timber market, many businesses said that it is unlikely that their prices will fall in a short period of time. After all, the problem of insufficient production capacity in the United States cannot be solved in a short time. Therefore, it can be foreseen that in the next two or three months, the domestic market of North American materials will continue the trend of fewer goods and higher prices.
It is worth mentioning that among various wood species, ash wood, red oak, cherry, and other wood species will face a greater risk of falling prices in the future due to their strong substitutability. Walnut, hard maple, etc. are irreplaceable, making their prices more resilient.
In view of this, it is suggested that all parties in the market can consider their actual needs and the price resistance of different materials to replenish their warehouses in a timely manner, but they should not overdo it.