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Market Brief

Early January economic news raised concerns. China’s first economic reports of 2016 showed that increased fiscal stimulus and a series of interest-rate cuts have failed to boost flagging manufacturing growth. The price of oil fell below $29 per barrel, which will reduce manufacturing and transportation costs for the short-term, but has also lowered economic expectations. Prospects of additional improvements in home construction are lifting hardwood producers’ hopes, though actual housing gains won’t match housing industry forecasts. The fall 2015 surge in U.S. hardwood exports was unprecedented. That, too, could be a double-edged sword if the aftermath is a prolonged period of diminished demand, as occurred with Red Oak following the fall 2014 export surge. Monthly Red Oak shipment volumes to China from Aug through Nov were the four highest ever. It could be March before we know with any certainty how strong China will emerge from its New Year.