Transporting Material Continues to Remain Unhindered

As we start to approach the middle of August, one thing that remains constant is change. The certainty we have in the market one week can quickly change into the following week.
 
Although print last week wasn't overly positive, this week has started off with a little more positivity. Futures has shown some strength, and in turn, we are seeing mills a little busier to start the week, and customers are looking to cover some immediate needs.
 
Most customers are still reluctant to step in with any significant volume, but the risk of being without material has caused some to cover their short-term needs. Even though we feel that we have seen a big drop in pricing, we are advising caution on 'loading the barrels' as there still feels like there could be buying opportunities in the not-too-distant future. 
 
As we said last week, save for a few tight items, we do feel like there is some potential downward pressure coming over the next few weeks. The positive news is that although some order files are starting to shrink slowly, most still have healthy order files through the next 6-8 weeks and will need to continue to cover those needs. 
 
Mills over the past week have been quieter than weeks previous, and some have been anxious to take on orders. If material is on the ground and they have the ability to ship, price concessions have been available. With that being said, there are still items that are in high demand that have the ability to generate a premium, and counters aren't available on those. A good question to ask is, "when is the material available to ship?".


Supply & Distribution Update

Mill lists show continued good availability in SPF #2 2x4/2x6 in 8’-16' lengths and tighter availability in 18' and 20' lengths. Currently, #2btr 2x8, 2x10 and 2x12 remain less readily available. Availability in 1650/1800 MSR remains broad. However, 2100/2400, particularly longs, remain in high demand and have thin availability.

Plywood mill order files with shipment by truck are being quoted into late August or early September. Order files on OSB from mills in the west are into late August and early September as well.

Transportation of material continues to make its way from producers to buyers unhindered. With the slow pace of the market, competition between carriers has increased, and freight rates have improved marginally while still elevated above historical levels. Surcharges to areas further afield remain.

Activity out of distribution centers has remained active. Buyers continue to work to cover holes in inventory and wait for clear indications of market direction before stepping out on larger buys. 

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Dimensional Lumber

Summary

Last week was pretty slow from the mill side of things. With the short week in Canada last week, we saw quite a few customers on vacation; thus, Canadian inquiries were especially quiet.  

As was stated last week, it feels like we have a two-tiered system with regard to mill sales. Local mills with local deliveries seem to be much more amicable to reducing their inventories and accepting reductions to their pricing. Mills have indicated that the inquiries they are filling have been for August delivery, with most holding off on September purchases until later in the month.

2x4

Prices on 2x4 fell the most out of all widths in the last week. Although mill prices did drop $30/m-$50/m in most cases, distribution numbers on 2x4 were seen much less at a $100/m lower than mills on certain tallies. Availability remains good on #2btr but tighter with the premium non-prior select mills. Order files range from 2-4 weeks.

2x6

Offerings on 2x6 are varied and have slipped just under $600/m on the Canadian side. But 2x6 did not see the same drop in price as 2x4, and we have seen $10/m-$20/m price reductions at mills. Again, distribution continues to drop prices below mill offerings to move piles.

2x8

Although demand for 2x8 has been moderate, we are starting to see some downward pressure, with most buyers only looking to fill prime lengths. 

Mill offerings are scarce, making prices relatively unchanged over the last week. 

2x10

The 2x10 market had remained strong over the last several weeks. As a result, prices out of mills have stayed on the firm side, although we see some cheaper offers again out of distribution. 

A few mills are also looking to move volume that had built up from previous weeks' demand on a prompt ship basis.

2x12

There is very limited availability on 2x12 out of most mills, which has been the case for several months. Prices have come down $30/m-$50/m over the last 2 weeks. Longer lengths remain widely available, while many mills stopped producing on the short end. 


Studs

Stud demand has been moderate on the LTL side, helping buyers mitigate downside risk on truckload volumes. Prices continue to be cheaper through distribution than in mills. Mill prices remain relatively unchanged over last week, with some taking on counters in the $10-$30 range. 

It appears that 2x4 9s seem to be taking the lead in the fall, with 2x6 9s seeing limited availability and no change to prices.

Meanwhile, 2x4 and 2x6 92 ⅝ have been stagnant. Order files are to the end of August with most mills.

 


MSR Lumber

The demand for LTL MSR continues to be extremely strong. As with most industries, truss plants are viewing inventory as a risk and want to lower that risk if at all possible. Most of our purchases have been for our inventory locations so that we can fulfill that demand for prompt LTL MSR.

Shipments from the mills continue to be inconsistent. Depending on which location they are shipping from, we can have material on time to 2 weeks late in some cases. We are encouraging our customers to cover their next 3 weeks of MSR needs as inbound stock can be unpredictable and, in most cases, out of our control as the mill handles the freight.

Last week we saw mills slowly add to their order files, which has been the case for the last few months, with 2x4 and 2x6 2100 leading the way regarding sales and inquiries. Some footing has been found on 2x4 1650 and we are starting to see some real value there as the premium on that has reduced dramatically from earlier this year. This is making it affordable if the tally is right.

There is continued high demand on 18' and 20' and lack of availability is keeping the premium on those items still quite high. We are still bringing in what we can for long lengths. Still, we have noticed a reduction in availability over the past few months, and it doesn't seem to be getting any better. 


Panel Products

Summary

The panel market continues in the second week of a flat print. Activity has been largely in LTL play, with most buyers filling in hand-to-mouth as needed.

We anticipate seeing flat print by mid-week. 

Plywood

Plywood has been quiet to start the week on the heels of a flat print. Mill order files are into the end of August, with reported prices just over print levels on cash offerings. 

Inquiries have been steady on the LTL side, but truckload has been stagnant, as many buyers have loads bought for early August shipment and will work through those that are well-costed until replenishment is needed. 

OSB

OSB is in much of the same position as plywood, with the exception of order files being pushed a little further out into September in some cases. 

Prices remain on a case-by-case basis, with 3 mills in the west remaining off the market on cash offerings altogether. 

Trading levels are all over the map, with some prices reported at print levels with distribution looking to move incoming contracts. 

Inquiry out of the east has been stronger than the west, as they take the lead for the demand. 


Available Materials

Please keep in mind that we have well-priced weekly lumber, plywood and OSB contracts. We also have fully stocked inventories with LTL options to cover any necessary requirements.

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