Happy New Year?

Here's a wish to you for a Happy New Year!

Wait, you say... what makes anybody think it'll be happy, at least for those of us in the wood flooring business? The pundits and corporate leaders in the trade have declared uniformly that 2011 will be a sluggish year for flooring of all kinds (see Floor Covering News dated December 6/13 - http://www.fcnews.net/ ). No particular joy there.

But did you see the copper close today? Copper prices are up 33% for 2010. Other metals prices have been strong too. But copper takes the cake.

So what?, you say. Floors aren't made of copper...

As a former professional trader, I know a few things about copper, and copper trading. Did you know that copper has always been referred to as "the metal with a PhD?" Yes, historically, copper is considered to be the vehicle for the "smart money" forecasts about industrial activity in the coming months. And copper closed the year up 33%!

This is meaningful. Oil closed up as well, gold and silver, other commodities too. But those contracts only have undergraduate degrees. Not copper. Copper has a PhD. Copper knows something.

Maybe copper simply knows that the Chinese are going bonkers industrially. But, everyone knows that! Maybe copper knows that the Chinese industrial juggernaut is going to rub off on the entire world in 2011?


I have another indicator too, a personal one. From many years of supplying and servicing the industrial wood flooring markets (trucks, trains), I have observed that the industrial flooring market turns, up or down, about six months before the general US economy. It's been like clockwork for twenty-five years, through five economic expansions and contractions. And guess what...

That market turned up last August, 2010.

Our commercial and residential wood flooring business turned upward in late November and December, 2010. That other market, the industrial market, is still screaming hot in December, 2010.

Copper, and industrial flooring, and Plantation Hardwood Floors are all shouting, "Happy New Year!"






 

The Christmas Miracle

Much has been written about the Christmas Miracle, that being the birth of the baby Jesus, and related subjects. This is not about THAT Christmas Miracle.

This is about the fact that most of my friends and acquaintances in the wood flooring business are BUSY! The orders are flowing, the factory is humming! Christmas vacations here have been cancelled, or postponed, so we can get the orders out!

We're calling it the Christmas Miracle.

We at Plantation Hardwood Floors hope you're enjoying your own Christmas Miracle, whatever and wherever that may be.

Import Duties - Who Forgot to Close the Back Door?

The Federal Trade Commission, or whatever alphabet soup agency is driving this bus, proceeded to authorize the formal investigation and imposition of two kinds of import duties on Chinese engineered wood flooring. If the intent was to stop the importation of subsidized flooring, it looks to be a failure already.

If I understand this situation properly - and who knows if anyone understands this situation properly? - imports from China after February or March, the date being not specific, will carry the import duties. Imports prior to that date come in at current rates (that is, duty-free).

So, importers and Chinese manufacturers defending their massive market share in the U.S. have until February or March to do whatever they're going to do. And what would that be? BUILD INVENTORY, of course! This office hears talk of hundreds, if not thousands, of containers of Chinese engineered flooring being prepared for shipment to North America, immediately. The thinking goes, so I'm told, that one year's worth of inventory stashed in the U.S. will protect the business while alternate factories are being set up in Vietnam, Malaysia, and/or Indonesia. These alternate countries already have flooring production infrastructure, and are not threatened with U.S. import duties.

So what's been accomplished? Besides severely annoying the Chinese govenment and some large American enterprises, it's probably not hard to conclude that cheap flooring not only has not been eliminated, but is probably here to stay, from many now-diversified Asian sources. Good news for many, including for Indochina and Southeast Asia producers, and for low-priced, deal-seeking American property owners; not so good news for the coalition of companies that brought the action to begin with, and all other domestic parties facing international competition for the scarce wood flooring buyer.

Well then, how about some more positive, and somewhat related news? We closed a deal to provide U.S.-produced custom wood flooring to a project in China... too bad it's not thousands of containers, or else we could claim to have single-handedly offset the apparent bungling of this trade action.

At least, we've deposited some yuan in our account at Bank of America...and we appreciate the business!