Posted on 01/10/2019 8:13:06 AM PST by Steve1999
Meanwhile, Germany, Austria, Sweden, and other European countries have all greatly increased sales of their lumber to the US. Now, we can see why. They can not sell it at home because their economy sucks.
Read in the WSJ that the reason for the collapse is environmental regulation. Apparently they finally decided to enforce them and the auto companies weren’t prepared.
American businesses can fill that gap!!
Ifo business climate index trending down
https://tradingeconomics.com/germany/business-confidence
ditto GfK consumer confidence
https://tradingeconomics.com/germany/consumer-confidence
But these could be warning of a mere slowdown (slower growth) than a recession (actual decline).
The German economy has been a bit erratic since the Financial Crisis of 2008 mainly because of adjustment problems among her trading partners. There was a modest recession following the crisis. Then, a few years later, the second shoe dropped when the European Central Bank’s plan to restore normal conditions failed in the countries of the southern tier of Europe. I jury is still out as to whether the euro and even the EU itself will survive these tough times.
Its a false pretense the Chinese have even fallen into. The Chinese have entire cities they built with nearly nobody living in them.
Weren’t they just crowing about how well their economy was doing?
What kinds of lumber are those? How can the EU members beat Canada on price?
Mostly Spruce 2x4, 2x6 ,2x8 and 2x10 2&btr Premium very heavy to all 16’. The Europeans are very good at producing just the prime lengths(16’).
We are also importing a lot of 1x4 and 1x6 #2 Spruce from Russia, Germany and Austria. Again these are almost all 16’ lengths. These are in S4S and run to tongue and groove patterns.
Thanks.
That’s not why though. The German government has stiffer emissions standards than they’ve been using. The German companies thought they’d just ignore them as they have been doing. But the government decided to enforce them and the companies weren’t ready. The only thing they could do is shut down assembly lines that were producing the most polluting vehicles.
EU can not beat them on price delivered to US locations close to the US/Canada border. However, the farther you get from the border(Florida, NO, TX, SC, GA) the more the Euro spruce 2x4 is competitive.
It is a function of freight costs. For example, if the EU mill is close to the port where it loads on a boat. However, I am buying 2x4 Spruce lumber from the importer who brings it into the port of Baltimore. The sawmill is in southern Germany. They load the lumber on a railcar at the mill and rail it up to Hamburg. From Hamburg it goes by boat to Baltimore. Then from Baltimore it goes by flatbed common carriers to customers in PA, MD, VA & NC. It is not competitive to truck it to Minneapolis from there or Detroit, Chicago, St Louis because it is a commodity and Canadian lumber is cheaper to those places.
There is exception to that when you are selling 1x6 run to Tongue and groove patterns or other more expensive boards.
These are typically shipped in a container from a European port to a US port. Then they are shipped from the US port again by flatbed. These higher priced lumber items will ship all the way from Baltimore to Oklahoma City because they sell for about double the price of 2x4’s. However, it is probably cheaper to bring the container to Houston because there is less trucking freight from Houston to OKC then Baltimore to OKC. So generally European lumber is more competitive the closer you are to where the boat comes into the port.
Wonder how much Iran sanctions, if anything, have to do with those numbers....
There is currently European lumber coming into the following ports: New London, CT; Philadelphia, Baltimore, Wilmington, Charleston, Savannah, Cape Canaveral, New Orleans, Houston in literally boat loads.
We are also shipping individual containers to these ports and also ports on the west coast like Long Beach, Oakland, and Seattle/Tacoma.
In some markets like Florida, SC, eastern NC, Euro is the dominate specie being used in replacement for Canadian Spruce. It is not replacing Southern Yellow Pine in the southeastern markets because SYP is used for pressure treating and strength in wood trusses.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.