- Spruce/Fir lumber prices experienced significant volatility since the fall of 2018 when they peaked at record levels. A significant price correction took place in 2019, bringing prices below breakeven for many mills. Subsequent capacity reductions have buoyed prices back up to profitability for most mills.
- Eastern White Pine markets have remained solid with less volatility than Spruce/Fir. Prices fell by about 10% in 2019, but are still providing sawmills with good margins.
- Hardwood markets continue to struggle, partly impacted by the trade wars with China, and partly due to softening demand, especially for Red Oak and to a lesser extent, Maple. Many hardwood mills will struggle with profitability in 2020.
- Housing starts seem steady at the 1.2 million level with little potential for increase. This will cap demand for framing lumber unless things pick up beyond current levels.
Pulp and Paper
- Pulp prices have softened from their rally over the past two years, but are still solid based on historic levels.
- Continued expansion in pulp and paper capacity in Maine has buoyed pulp prices and elevated demand for harvested wood.
- The overall outlook remains positive for the Northeast which continues to convert capacity to tissue and packaging.
- Improving markets for containerboard and tissue, along with solid pulp markets have supported capital projects at various Northeast pulp and paper mills.
- Many landowners are at or below their harvest expectations, as logging capacity is now short in much of the Northeast.
- Many logging operations are reluctant to invest in additional capacity until they feel more certain that current harvest conditions will be sustained.
- The availability of skilled labor is restraining expansion as well.