Navigating Stagnant Waters: What's Next for the Lumber Market?

As we cross the midway point of April, the market's trajectory remains cautious, echoing the patterns we've observed over recent weeks. Despite entering what is typically a bustling building season, the anticipated surge in demand has yet to materialize, leaving inventories comfortably sufficient.

Our conversations with customers reveal a reserved optimism, hinging not on immediate needs but on speculative future upticks. This temperance in demand suggests that the driving force behind any forthcoming market shifts may not stem from consumer engagement but from strategic supply adjustments.

Notably, the atmosphere at the recent Montreal Wood Convention mirrored this sentiment, adding a layer of cautious perspective as we move from April into May. The market's pulse feels subdued, and it appears we are bracing for further stagnation unless a significant catalyst emerges to invigorate either supply or demand dynamics.

As always, we are closely monitoring these developments and are prepared to adapt our strategies to navigate these uncertain times effectively. Stay tuned for our detailed analysis and strategic recommendations in the sections that follow.

Supply & Distribution Update

This week, the softwood lumber market experienced a notable slowdown, exacerbated by the recent Montreal Wood Convention, which drew many traders away and contributed to subdued trading activity. Despite a persistent mismatch where demand continues to outstrip supply, mills are showing a growing receptiveness to negotiate on prices for available stock, indicating a shift towards buyer favour in some negotiations.

Sales dynamics out of distribution have seen some improvement, primarily due to buyer resistance at current price levels and an oversupply in the market. This environment has led to an increase in smaller, less-than-truckload (LTL) orders and diverse truckloads, as buyers opt to fill immediate needs without committing to larger, riskier purchases. This cautious purchasing behaviour is likely to persist until signs of a price floor emerge.

On the logistics front, transportation across Canada remains robust, with high truck availability in BC, AB, SK, and MB. As Ontario and Quebec begin to lift spring-thaw road restrictions, we anticipate further improvements in truck availability, which should enhance supply chain fluidity into Eastern markets. Despite rising fuel prices exerting pressure on freight rates, the competitive nature of the transportation industry is tempering the pace of these increases.

In summary, the market is navigating through a phase of cautious optimism and strategic purchasing, with all eyes on potential shifts that could prompt more decisive movements. As we continue to monitor these trends, staying agile and informed will be key to navigating the evolving landscape.

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Canada Releases Seasonal Outlook, Wildfire Projections, Emergency Plans

CFI Staff - Canadian Forest Industries

Canada is preparing for a challenging wildfire season due to warmer-than-normal winter temperatures and widespread drought conditions exacerbated by El Nino. The seasonal outlook for 2024 anticipates significant fire activity starting as early as April, particularly in western Canada, eastern Ontario, and southern Quebec.

In response, the government has enhanced its emergency response framework and increased investments in firefighting resources and training. A new focus includes the Indigenous Emergency Management Working Group, aimed at addressing the specific needs of Indigenous communities.

Officials stress the need for proactive climate change management and collaboration to mitigate wildfire impacts. This includes bolstering national and international partnerships and enhancing local and indigenous capacities in wildfire management. The government remains committed to protecting communities and building resilience against the escalating threats of climate change and extreme weather.

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Canadian Housing Starts Fell 7% in March, CMHC Says

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Canadian housing starts fell by 7% in March from the previous month, Canadian Mortgage and Housing Corporation (CMHC) data showed on Tuesday.

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US Single-Family Housing Starts Plunge; Building Permits Drop

Lucia Mutikani - Reuters

In March, U.S. single-family homebuilding significantly decreased by 12.4%, influenced by a resurgence in mortgage rates and a persisting shortage of pre-owned homes for sale. Construction permits also fell to a five-month low, signalling potential slowdowns in future homebuilding activities. Despite some recovery in residential investment in the latter half of 2023, the housing market's rebound is losing momentum due to less optimistic expectations regarding interest rate cuts. On the other hand, manufacturing showed signs of improvement, with factory production increasing by 0.5% in March, suggesting a potential turnaround for this sector that was heavily affected by the Federal Reserve's tighter monetary policies. Overall, the U.S. housing market is facing challenges from rising mortgage rates and economic uncertainty, while manufacturing begins to stabilize.

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B.C. Continues Investments to Support Forest Sector

BC Government News

British Columbia is boosting its forest-products sector through the BC Manufacturing Jobs Fund (BCMJF), investing up to $70.3 million in 50 projects to transition and diversify forestry operations. This move is aimed at enhancing the production of high-value, sustainable wood products, supporting over 2,500 jobs. Significant capital investments totalling more than $334 million are directed towards advanced wood manufacturing, including new wood products and biofuels, to meet both domestic and international demands. A notable recipient, A-1 Trusses Ltd., received $9.5 million to expand operations, creating 125 jobs and diversifying into prefabricated building components. These efforts are part of a broader strategy to stabilize and grow the forestry industry while adapting to global market challenges and advancing economic sustainability in British Columbia.

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US Builder Sentiment Unchanged in April

Robert Dietz - National Association of Home Builders

Builder sentiment for newly-built single-family homes remained unchanged in April, holding at an index value of 51, despite previous gains. This stability reflects builders' caution amid near 7% mortgage rates and uncertain future interest rate movements. In April, 22% of builders reduced home prices, maintaining an average price cut of 6%, while sales incentives also saw a slight decrease. Regionally, confidence varied, with the Northeast and Midwest experiencing increases in their three-month moving averages, suggesting a mixed regional recovery in the housing market.

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Dimensional Lumber


The dimensional lumber market remained muted last week, continuing a pattern observed over recent weeks. Despite a gradual increase in inventories at the national level, mills have been slow to sell compared to their production rates, leading to steady downward shifts in ask levels. This persistent softness in the market is underscored by a general lack of urgency among buyers, who remain sidelined by both the downward price trend and negative sentiments in the futures market.


Prices saw a modest decline, reflected by low double-digit reductions across various lengths. This downward pressure is expected to persist, as material availability begins to outpace demand. With mills adopting a more flexible approach to pricing, especially for products in immediate supply, buyer hesitance remains a dominant factor.


Mirrored the overall market, showing a similar decline. Despite a slower production rate compared to 2x4s, the lack of robust demand keeps this category aligned with broader market trends. Mills are increasingly open to negotiating on larger orders, reflecting the current surplus of supply over demand.

2x8 & 2x10

The market also trended downward last week. Wides are experiencing a slight easing in the market's resilience, likely due to lesser volumes and reduced production rates. Although they may react more quickly to any market engagement due to these factors, the immediate outlook remains soft, with ample availability for buyers.


The market ended the week stable, with little change in pricing or demand. This segment continues to see minimal activity, with production levels reflective of the subdued market interest. However, for those interested, there may be opportunities to negotiate favourable terms with mills given the overall market flatness.


Last week, stud demand remained subdued as buyers continued to approach the market with caution, primarily covering only immediate and near-term needs. This trend of tentative purchasing is driven by the anticipation of further price reductions, which has kept buyers holding out for more favourable conditions before committing to larger orders.

Mills, in response to the lacklustre demand, have shown increased flexibility in their pricing strategies. Order files for most trims extend out 1-2 weeks, indicating a relatively soft market. In an effort to stimulate demand and clear accumulated prompt supply, mills are more readily accepting lower offers and have introduced moderate price decreases across most trims.

Despite the availability of product and more negotiable pricing, many buyers remain underbought due to the absence of seasonal pressures and a persistent hope for deeper price cuts. This cautious stance has led to a continued standoff between buyers and mills, with mills willing to lower prices but not to the extent some buyers are waiting for.

As we move through the current week, we expect this cautious and hesitant market tone to persist. The disconnect between mill concessions and buyer expectations continues to define the stud market, suggesting that any significant change in purchasing behaviour may hinge on broader economic indicators or shifts in supply dynamics.

Treated Lumber

This past week in the treated lumber market was relatively quiet. As we move further into the start of the treated season the repair and renovation sectors have not yet fully engaged, maintaining a level of flatness in market activity. However, there is a moderately positive sentiment as we edge closer to the heart of the season.

The start to the treated lumber season has been more subdued than some retail expectations might have suggested. Despite this slower commencement, there has been a steady, if quiet, level of product movement. This indicates an underlying stability that may benefit the market once seasonal demand increases, particularly as we near the May long weekend—often considered the unofficial kickoff for treated lumber purchases.

Currently, there are some logistical delays reported at mills in terms of filling orders and delivering to yards, suggesting that there is not an oversupply issue at this stage. This bodes well for market balance once demand picks up in earnest.

Looking ahead, the key factors to watch will be the impact of higher costs and household affordability, which could influence the anticipated uptick in market activity. These economic pressures might temper some of the optimism for a robust season, yet the foundation appears solid for when the market does begin to engage more fully.

As we continue to monitor these developments, staying informed and adaptive will be crucial for navigating the coming weeks in the treated lumber sector.

MSR Lumber

The market for Machine Stress-Rated (MSR) lumber saw a continued quiet trend last week, echoing the recent pattern of cautious purchasing and slow sales. Truss manufacturers, a primary buyer of MSR lumber, are busy with quoting activities, yet actual orders are lagging as they await confirmed purchase orders from builders. Despite this hesitance, there is a general optimism for increased activity in the upcoming second and third quarters.

In response to the subdued sales, mills have begun to offer discounts on readily available MSR lumber. Specifically, 2x4 1650 has started to accumulate inventory, with several mills listing multiple cars ready for prompt shipment. This suggests that pricing for this item may remain soft in the near term, providing a good purchasing opportunity for those in need.

There is also some movement in the normally rigid tallies for 2x4 and 2x6 2100, where we are beginning to see more flexibility. This adjustment may not persist long-term, but it presents a current opportunity to secure specified tallies for upcoming stock needs within the next 2-3 weeks.

Conversely, 2x8 MSR remains in shorter supply and high demand has not been as strong. However, pricing has remained stable due to limited production. For those with forthcoming projects requiring 2x8 MSR, securing this material sooner rather than later is advised, as availability could quickly shift. As always, we are here to assist with any inquiries regarding MSR lumber pricing or availability. Don’t hesitate to reach out to our team at CEWP for the latest updates and support in planning your lumber purchases.

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Douglas Fir & Larch MSR

The Douglas Fir (DFL) MSR market experienced another quiet week, with the looming potential of price softness beginning to emerge. A slight decline was noted with a $5 drop in 2x4 and 2x6 1800/2400 grades. This shift is a reflection of the varied strategies mills are employing to navigate a challenging market landscape. Some mills are lowering prices to engage the cash market more effectively, others are considering significant discounts on prompt loads, while a few remain firm on their asking prices, anticipating better conditions in the near future.

The pricing for DFL MSR products continues to fluctuate as mills seek new equilibrium levels, with supply inconsistencies remaining from mill to mill. The difficulty in sourcing 8’-20’ tallies persists, contributing to an overall disjointed market feel. Delivery times range from prompt to up to four weeks, indicating ongoing supply chain adjustments.

As we progress through a tentative early season, amidst uncertain economic conditions affecting both end-users and homebuilders, mills are expected to maintain a cautious production stance. This strategy is aimed at managing inventory in alignment with subdued demand, preventing overproduction and subsequent market flooding.

Buyers have adopted a similarly cautious approach, capitalizing on opportunistic purchases of essential materials through distribution channels or picking off attractively priced prompt truckloads. However, the urgency remains low as the transition from quoted to sold jobs is slow.

Looking forward, the market is expected to remain subdued in the short term, with potential for ongoing downward price adjustments. As the season advances and field usage potentially increases with warmer weather, it will be crucial for stakeholders to monitor the introduction of newly produced material into the market closely. This vigilance will help in aligning supply with any upticks in demand.

For those navigating this market, it is advisable to continue covering immediate needs judiciously, taking advantage of pricing opportunities as they arise, while preparing for a possible increase in market activity driven by increased demand.

Panel Products


In the Western Canadian market, plywood continues to exhibit minimal activity, marking the fifth consecutive week of flat pricing. The Montreal Wood Convention echoed this sentiment, reflecting a subdued outlook on plywood demand. Distribution centers in the region are currently working through significant inventory levels, leading to a wide variance in price quotes. As demand for large-volume purchases remains tepid, order files are scheduled for shipment by the end of April, focusing mainly on covering short-term needs.


Similarly, the OSB market has not seen much improvement, with sales remaining sluggish. Buyers have been cautious, pulling back even on short-term contracts, which has shifted the responsibility to distribution channels in the West to set selling levels. These are currently marked by a narrow price range for immediate availability. Despite some signs of market weakness, supply constraints persist, and mill order files are extending from late May into early June. This supply tightness is maintaining some price firmness, though the overall market momentum is slow.

On-Ground Inventory

We have inventories across the country to help fill your LTL and prompt lumber needs. Whether it’s studs, dimensional lumber, MSR, OSB or plywood, we have material on the ground and can fill your mixed truckload needs.

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