Issue link: http://palletcentral.uberflip.com/i/801657
20 PalletCentral • January-February 2017 palletcentral.com suppliers more opportunities in 2017. Technological advances are lowering the price thresholds for drilling to be profitable. Also, the natural gas sector should benefit as more electric power generating plants shift from using coal as fuel. Lastly, industry reports predict favorable U.S. natural gas prices will create more export opportunities. A Deloitte LLP survey found that 59% of oil and gas professionals expect the industry to see broad recovery in 2017, including higher capital expenditures. Framestock The U.S. residential furniture factory shipments, by value, were virtually identical during the first nine months of 2016 compared to the same period in 2015, according to consulting firm Smith Leonard. However, anecdotal information suggests upholstered furniture shipments increased slightly. Despite this, solid hardwood framestock prices declined more than 30% in 2016. The collapse in prices was the result of two related trends. First, it appears 2014-2015 price spikes pushed buyers toward other raw materials for framestock, primarily panel products. Second, sagging markets for other industrial items kept framestock production elevated despite faltering demand, which accelerated price declines. Myriad upholstered furniture factories are now accustomed to using panel products, and even the lowest hardwood framestock prices in more than 10 years have not revived demand. It appears the market for solid hardwood framestock has permanently contracted. Takeaways The hardwood industry has lost market share in the pallet and upholstered furniture sectors – perhaps temporarily but possibly permanently. Limited supplies and relatively high prices helped hardwood sawmills' bottom lines for a while but ended up costing the industry in the long run. Contractions in these and other industrial markets is one of the primary reasons U.S. hardwood lumber production was down 0.2% year-to-date through November 2016. PC MARKETS Hardwood Market Report (HMR) has provided weekly price and market information on North American hardwood lumber and lumber products continually 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.