Crossties

NOV-DEC 2017

Crossties is published for users and producers of treated wood crossties.

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RTA EVENT CALENDAR CONTACT US RTA EVENT CALENDAR CONTACT US ADVERTISE Stella-Jones Corp. Railway Tie Association Wheeler Lumber Nisus Corporation MiTek Industries CROSSTIES • NOVEMBER/DECEMBER 2017 9 TRENDS The RTA economic team takes mem- bers' concerns and questions very seri- ously, so it took additional steps to illus- trate some of the important points raised by the initial inquiry. First, two graphs were aggregated from the Purchases Report (the 12-month mov- ing average of purchases and production, and the 3-month moving average of inven- tory). In doing so, the monthly fluctuations of purchases and production are smoothed while the inventory short-term trends are preserved (see Figure 3). This graph clearly illustrates the downward trend in inventory since earlier this year. Secondly, the team created graphs apply- ing long term trend lines only to the pur- chases and inventory data in the 12-month moving average format (see Figure 4) and the additional (aggregated) way with inven- tory presented in 3-month moving format (see Figure 5). In both cases, the overall gap between purchases and inventory is clearly widen- ing, not narrowing. This is the case because the trend lines derive from the actual monthly data, not the moving averages of that data. Producers and users alike should con- sider the potential consequences of this gap widening in the context of other recent reports from the field, such as increased shipments of oak logs to China and other marketplace trends for low grade hardwood products. A gap that widens as a result of increasing purchases over time, coupled with reductions in inventory, could produce pressures within the supply/demand equa- tion. Ideally, one might hope for a trend in which purchases and inventory are more closely aligned to minimize shortages and/ or over-supply situations. This is one reason the RTA economic team produces the online reports every month along with the dashboards of procurement reports from the field. The balancing of supply and demand is never an easy task. However, by maintaining an intense focus on reporting accurate member data in many formats, RTA provides mul- tiple tools, the use of which may make it possible for the job to be less daunting. 500 700 900 1,100 1,300 1,500 1,700 1,900 2,100 2,300 2,500 10,000 15,000 20,000 25,000 30,000 35,000 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Production and Purchases Inventory 12-months Moving Averages of Tie Production, and Purchases, and 3-months Moving Average of Inventory (in 000) Production Inventory Purchases 500 700 900 1,100 1,300 1,500 1,700 1,900 2,100 2,300 2,500 10,000 15,000 20,000 25,000 30,000 35,000 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Purchases and Production Inventory Trend lines for 12-months Moving Averages of Tie Purchases and Inventory (in 000) Inventory Purchases Linear (Inventory) Linear (Purchases) 500 700 900 1,100 1,300 1,500 1,700 1,900 2,100 2,300 2,500 10,000 15,000 20,000 25,000 30,000 35,000 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Purchases Inventory Trend lines for 12-months Moving Averages of Tie Purchases and 3-months Moving Average of Inventory (in 000) Inventory Purchases Linear (Inventory) Linear (Purchases) FIGURE 3 FIGURE 4 FIGURE 5

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