Issue link: http://palletcentral.uberflip.com/i/713205
26 PalletCentral • March-April 2016 palletcentral.com over 2014 and were up 10.2% in the first four months of 2016 from the same period in 2015. Transportation is even more significant. It is larger than any other single sector of the U.S. economy. In 2015, transportation equipment shipments rose 6.9% compared to 2014 and increased a solid 7.0% the first two months of 2016 over 2015. All indications are for steady demand for pallets. How are hardwood supplies positioned for the remainder of 2016? There has been a major change in direction for hardwood lumber and industrial products. For the first time in years, low grade lumber and industrial timber markets are underperforming grade lumber markets. As mentioned earlier, hardwood pallet cant and lumber suppliers have lost business to softwood suppliers. Despite higher purchases through the first half of 2016 over 2015 by the tie industry, projections by the Railway Tie Association show purchases will fall in 2016 from a year earlier. Demand for board road and mat timbers has increased slightly in 2016 from last year but is bouncing off a low level in 2015. With performance off by the low grade and industrial timber market sectors, there are concerns hardwood sawmills will not be able to ship all developing material from processed logs. Frankly, they must. It is critical to have markets for the full run of production to operate efficiently. There is no evidence of chronic problems with sawmill production, yet. Data points out hardwood lumber output is only marginally lower through May 2016 compared to January to May 2015 (-2.0%). To this point, reductions have been weather related, not market related. At the time of this writing, the supply/demand balance for hardwood pallet lumber and cants favors supplies. However, sawmill operators are adapting to weak markets for pallet material and other sawn industrial products. Business is need driven but strongly influenced by relationship, perhaps even more so between hardwood suppliers and the wooden pallet industry than other market sectors. PC MARKETS Hardwood Market Report (HMR) has provided weekly price and market information on North American hardwood lumber and lumber products con- tinually since 1922. Recognized as the authoritative source of data and market analysis, HMR is circulated throughout the world in print and via Internet at www.hmr.com. For more information, email: David Caldwell, Associate Editor, at david@hmr.com; Judd Johnson, Editor, at judd@hmr.com; Andy Johnson, Associate Editor, at andy@hmr.com. "The supply/demand balance for hardwood pallet lumber and cants favors supplies." — Andy Johnson, HMR