Questions Remain About Market Demand Strength

It’s our final newsletter to wrap up November before we turn the page on another month and inch closer and closer to the expiry of 2023.

Looking back at November, it has been a very interesting month. We started the month on a better footing after a pop in the market, which led to a bit of a rally in pricing across the board as we saw a quick round of robust sales. There was also diminished availability from mills which continued for the balance of the month.

The diminished supply base has been evident now for a number of weeks, as we have seen less readily available material on mills lists, be it national or at the regional level, across a variety of dimensions and lengths.

The reality in this situation, however, is that although we have certainly seen a diminished supply base, the initial activity and the purchasing frenzy seem to be short-lived and the followthrough that has come about over the last 3 weeks has been, one would say, modest at best. With that in mind, the demand side hasn’t continued to show much strength. Even though we’ve seen less readily available material, it really hasn’t continued to push the market up in a meaningful way.

We’ve seen numbers certainly firm and purchasing has continued, however, as we enter our current week, we’re starting to get the sense again that mills in certain situations are starting to come around to the fact that their sales pace has slowed. They’re questioning whether they’ll see enough activity as we move into December to continue to hold this market.

Futures have played an interesting part in this as well as we’ve seen strengthening for a number of sessions. The overall position of futures is now trading at a premium to cash. Many are questioning whether we’ll see futures retrench as we move into December or if the cash market can continue to push itself up to meet futures.

At this point, based on the activity and the sentiment in the market, we do get the sense that unless we see another outside force influence the market from the supply side, it’s hard to say that we’ll see continued upward momentum on the cash market.

It stands to reason we could see things struggle to hold firm with the potential of a modest pullback as mills do start to see a little more readily available material build up with inadequate demand to continue pulling it off the market.

It’s going to be a very interesting time looking through December into January. There are a lot of questions about the strength of the market from the demand side going forward. We’re going to have to see what comes about over the next 2 weeks, which will be very telling.

Supply & Distribution Update

Sales to begin the week were steady but slowed as the U.S. holiday neared and mill offerings were lean in some widths and lengths. Producers used the tight supply to push quotes higher with mixed success. A pickup in treated purchasing contributed to that tight supply in the market but has slowed since and mill lists are once again starting to grow.

The end-user buyer demand has had little effect on supply and continues to be at a slower pace which is more common this time of year. It is apparent that the supply in the market is healthier this week compared to the previous week.

Sales out of distribution continue to be lacklustre at best. Buyers remain to fill only their immediate needs and usually replenish lean inventory holes. Many have seen limited demand as we head into the holiday season and close out November.

Prompt availability has helped drive sales as buyers speculate on short-term lumber prices and demand. This has contributed to distribution operating with idle capacity. Current price levels have shown some strength which has differed buyers from purchasing over their immediate needs.

Operations within the transportation industry have not shown improvements. Users have been increasingly satisfied by the service level and declining rates. Plentiful and affordable carrier availability reflects the challenges providers have faced in securing business through ‘23. Competition within the industry remains increasingly high and many organizations are struggling to stay afloat. Focusing on building those relationships with more common carriers will help pay dividends in the future.

It has been progressively important for providers to improve their service levels and ensure their rates are competitive within the market to gain the business required and keep equipment moving.

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News We Are Following

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With much of the spending set for after the next election, measures have been put in place by the Federal government to help make housing more affordable. Steps are being taken to ensure more homes are available by discouraging short-term rentals to foreign visitors, eliminating the GST from eligible new co-op rental housing construction, and removing municipal red tape for new construction. "Our government really understands that housing is an urgent concern of Canadians, and housing is so connected to affordability for Canadians," says Finance Minister Chrystia Freeland. More housing and more new builds bodes well for the future of the lumber market.

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Looking in2024, home sales and prices are expected to drop off, as is new residential construction as per an economist report. “The second round of [BoC] rate hikes may have ended well before November 2023, but its effects certainly haven’t,” writes Desjardins Economist, Marc Desormeaux. “Initially, sales activity in the high-priced Toronto and Vancouver markets bore the brunt of higher borrowing costs. Yet, at the time of writing, weakness is spreading more broadly, and national-level home purchases have given back three-quarters of the torrid gains experienced between January and June of this year.” And with resale listings climbing, it’s a sign that homeowners are struggling with these higher mortgage rates.

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Municipalities Say $600 Billion in Infrastructure Needed to Build 5.8 Million Homes

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Based on estimates from the Canadian Mortgage and Housing Corp. we’ll need 5.8 million new homes constructed by 2030 to restore affordability. However, the Federation of Canadian Municipalities notes that to reach that number of new homes, municipalities would need $600 billion in infrastructure funding. “We don’t expect that the federal government and the provinces will turn around on Saturday morning and write a check for $600 billion to fix this gap,” said Mike Savage, mayor of Halifax and chair of the Big City Mayors’ Caucus. “What we do expect is that they accept that it’s a real threat to the future of Canada, and particularly to its growth and that they look at the things they can do.”

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Dimensional Lumber


The dimensional market was fairly quiet to finish last week. However, this was not a surprise given the Thanksgiving Holiday in the U.S.

We began last week on a quieter tone and by Wednesday mid-day, you could really sense that we were going to see a very weak activity level to finish off the week.

This was certainly the case as the current market situation, coupled with Thanksgiving was the perfect storm for many to look the other way when it came to purchasing lumber. There was no urgency and as we start our current week, we haven’t seen a real uptick in demand as of yet following the U.S. holiday long weekend.

We mentioned in weeks prior that there is a bit of a psychological factor here as well with many feeling that we could see a bit of an uptick in takeaway for dimensional purchasing after the weekend, so many eyes will be watching the market quite closely this week to see if anything materializes. Thus far, it’s not looking like we’re seeing much change in the tone of the market.


We saw 2x4 flatten out on print to finish last week. A couple of lengths were up modestly, 12’ and 16’, but overall it was a flat tone to 4”.

Mill lists continue to be relatively thin, however, so it is holding pricing at a flat pace. We are starting to see a little bit more creep into some lists in some areas but it’s not building at a rapid pace. We’ll probably see 4” continue to trade modestly flat here for another week as the market looks for direction.

There continues to be a very strong premium on 16’ and we do see that holding at this point as they continue to be a challenge to source in the market overall versus randoms.


There was a little more strengthening in 2x6 again last week on print. It was modest across 10’ through 16’, but it was something positive. The reality is, that 2x6 has really struggled to gain traction throughout most of the fall, where many felt that we would see a stronger uptick in takeaway and a continued strengthening versus 4”. It continues to lag and we are seeing a little bit more available again popping up on lists at the regional level.

Pricing is trading in a fairly narrow band but there has been some slight softness reported in 6” on a case-by-case basis. Again, we’re not seeing the strength material in 2x6 and we’re starting to feel like we may not see this happen prior to rounding out 2023.

2x8 & 2x10

In 2x8 and 2x10 there was a bit of an uptick and strength=thening in the market over the last couple of weeks. Prior to our last week in the cash market, we saw limited availability on lists, which resulted in reasonable sales and a strengthening on print in both.

We did see print up again last week on 2x8 and 2x10 in that low double-digit level and we are starting to see a little bit more volume develop on lists to begin our current week than we have seen in the previous couple.

We’re probably going to see pricing on 8” and 10” flat as we follow through our current week. Again, it’s hard to suggest that we’ll see a strong takeaway in the wides so close to the last round of buying. The feeling here is that we could see them flat at best with a slight softening if we continue to see mills build up inventory in the near term.


In 2x12, it’s much the same as we saw a little bit of strengthening on print to finish last week. We are starting to see a little more on lists as opposed to the weeks prior. Again, stability on 2x12 is probably what the market is hoping for. We could certainly see a little downward pressure but probably not in our current week cycle. This may come about in the next 2 weeks if don’t see a surge in activity, which again, would be difficult to suggest so close after the last round of buying on a fairly narrow-banded market item.


Stud demand continues to mirror more of the same stance from weeks prior. Mills continue to see modest interest and are holding to sustained pricing with slim prompt offerings available. Mill order files remain extended well into December, with some lists already showing availability reaching into 2024.

Purchasers looking to cover immediate needs will find tighter prompt options both mill direct and through distribution channels, as we continue to see heavy interest in both mixed and partial truck varieties.

Of all trims, 2x4 9’ for weeks now has remained the most challenging to source and has maintained its premium pricing where available. As of late, both 2x6 trims have appeared more intermittently on lists. However, if you’re in the market for either, you should find availability in that 3-week or sooner window.

Most purchasers continue to present an overall uncertain and timid tone. However, steady week-over-week demand, pricing and tightening supply will have some purchasers stepping back in and looking to early 2024 sooner than later.

Treated Lumber

There is little to discuss regarding the treated market this week. Many programs are winding up as many decisions have been made for the 2024 season. There certainly is a little bit of cleanup happening here and there but for the most part, everyone has made their plans for the upcoming year.

We continue to see reasonable takeaway again, bolstered by the nicer weather as projects finish up but we should see that come to a close shortly. The treaters themselves look to have been participating in the market over the past several weeks sensing a good opportunity to cover off needs for the upcoming season.

We are seeing some of that buying continue but not at the same pace as before, so treaters may have covered reasonable amounts of their purchasing needs at this point in time and are looking to step back to wait while they assess market levels.

MSR Lumber

Last week’s market was fairly quiet as the U.S. Thanksgiving long weekend distracted many traders and buyers and mills were largely closed (or at least not taking orders) as of mid Wednesday. Given the limited time available, last week's sales were not robust.

The majority of mills are leaning on order files, and for the most part, are quoting out material into mid-December with 16s, 18s and 20s remaining relatively scarce.

LTL orders are still coming in steadily with most truss plants only looking to fill immediate holes as we approach the end of the year.

Please don’t hesitate to reach out if there is anything that you could use an update on.

Contact Us for Up-to-Date Pricing & Availability

Douglas Fir & Larch MSR

Thin and uneven availability out of mills, coupled with a modest end-user takeaway remained the story in the DFL MSR market. Mills have been successful in their efforts to restrict supply and shore up prices preventing further declines below the cost of production of DFL MSR products.

The perception that availability will remain tight through December and into 2024, and that downside price risk is minimal, has begun to be accepted by buyers. Considering ongoing light inventories in the field and the current limited mill offerings, there is the potential for unseasonable activity in the short term as buyers seek to ensure coverage for the next 4-6 weeks while capitalizing on current low prices.

Pricing on 2x4 2400 has remained steady to slightly upwards for the last eleven weeks and 2x6 2400 has been consistently flat on print for the past several weeks. Meanwhile, 2x4 & 2x6 1800 pricing has continued trending flat to down. Demand for 2x8 and 2x10 products has tapered off marginally from previous weeks.

Mill log decks have been inconsistent in their ability to support the consistent production of MSR wides and we anticipate options to remain limited and pricing to remain near current levels short term.

Through the last two weeks, mills have been closely examining all counters and accepting few. Across grades and widths, tallies including 16'-20' lengths remain few and far between and have proven resistant to price negotiations due to limited availability as they have sold quickly at or above asking prices. We have seen prompt 2400 loads as being most open to price negotiation, as 2400 continues to command a strong premium over #2&btr. If sales continue to be modest we anticipate the possibility of broader acceptance of mill counters.

Looking ahead, unless we see the needle move upwards on the volume of takeaway, there remains the strong possibility of extended mill shutdowns over Christmas and curtailments, to further mill goals of solidifying prices through a traditionally slow period in the market. Mills have operated in the red on many products for an extended period and cannot sustain operating losses indefinitely.

We suggest you stay in regular contact with your trusted CEWP trader for the latest developments in the lumber market.

Panel Products


Plywood is starting to show a little weakness to start this week. Cash price premiums are down a small amount over weeks prior while print has remained unchanged the past two weeks in the west.

Takeaway has also slowed somewhat as many had covered short-term needs earlier in the month. There is a sense that many will need to replenish again for Q1 as we approach the end of the year.

Order files range from early to mid-December out of Western mills.


OSB supply continues to be constrained, with no cash availability for anything prior to the end of the year out of Western Canadian mills.

Contract wood is being heavily relied upon as many are scrambling to cover short-term needs. Weather in the prairies has been unseasonably warm in most regions, which has also extended the takeaway and steady inquiry.

Mill order files range from mid to late January 2024 and prices have continued to show modest gains. Many buyers have speculated that there will be more availability come January and if they have covered off needs they are continuing to wait to see what may happen.

Lumber Quality

There are different needs for different applications. Lumber quality varies from grade to grade and mill to mill. If you’re unsure about something, please contact a trader and we will assist.

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