The Overall Tempo of Demand Feels Softer

Welcome to the month of May! We wrapped up April on a high note, and as we get the ball rolling in May, we certainly see things continuing along the same trajectory as we have seen over the past several months. May started off with a bang, as the futures market led the way Monday with a no-limit runup that saw historic levels shattered yet again. As we look toward the rest of the week, we are seeing much the same when it comes to the actual cash lumber market. 

Mills are starting the week with elevated prices on limited availability and strong order files pushing into early and sometimes mid to late June from some of our larger mill players. At the same time, we see smaller mills that may come to market once again commanding strong premiums for their material for those that need to satisfy immediate demand needs. 

The overall tempo of demand does seem to feel a little softer than what we have seen over the past few weeks. But the real question here is whether there is generally a bit of a pullback in demand, or if it’s just because the lack of available supply has caused a bit of a shortage as consumers simply cannot get their hands on what they need. We continue to hear stories on the allocation of certain products, supply chain constraints continue, and really at this point in time, as the numbers continue to rise up, the challenge remains to try to paint a picture when we see a pullback on numbers in the short to medium term.


Supply & Distribution Update

Following the challenges we continue to see on the supply side for mills, LTL and inventory demand continues to be weighed on heavily. With this next runup on price levels, we anticipate that customers will fall back on trying to cover their needs in a quick turnaround fashion out of distribution. Whether it is just the sheer cost of material, credit constraints, or psychological factors, many customers are turning to LTL business to attempt to satisfy their needs. 

Once again, we caution our customer base to please keep taking a strong look at your order file. That 3 to 5-week window is where your focus should be. Anything shorter than that is going to get you into a challenging spot where you are going to be out of material before you can replenish. 

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Dimensional Lumber

Summary

The dimensional market has once again started the week following the robust activity from last week. We saw print up again very sizably last week across all dimensions, and as we start this week, mills are piggybacking off the increases and pushing up yet again. 

It is yet to be seen where a leveling off may occur, but with the continued short supply of dimensional lumber, it doesn’t look like we have found it yet.

2x4

In 2x4, there was once again a strong runup. Demand continues to be almost insatiable, and mills are struggling to put product on the market at a pace fast enough to keep balance. 

The short end from the last few weeks continues to run strong, although there seems to be a bit more balance along with tallies, 8’ right through 16’. 

2x6

The 2x6 market, again last week and starting this week, does feel like it is in a little shorter supply. It seems that there has not been as much 6” being run, which is keeping the pricing aggressively high with challenges to find your ideal tallies.

Short end, as well as 16’, continue to be tough and are commanding a premium.

2x8

It was a relatively quiet week last week for 2x8, again, more so from the supply side as consumers look to replenish needs on the wides but are still really more focused on the narrow boards. 

We saw 8” print up again, in lockstep with the rest of the dimensional market. 

2x10

It is much the same for 2x10 with strong price increases and limited supply availability. We do not see much on mill lists, and again prices continue to push up. We are seeing good 3 to 4-week order files in trying to source your wides.

2x12

In a similar fashion to the last several weeks, 2x12 again commands strong premiums for 12’ and 16’ printing up again. The treated market is really taking away much of that production and not seeing much from offering on mill lists.


Studs

The stud market continues to see aggressive demand and interest over the last week. Mills maintained upward pressure with double-digit price increases across all lengths and are showing very limited offerings, now firmly into June.

Purchasers hoping to replenish immediate needs will continue to find limited availability, both direct and through distribution, as we continue to see heavy interest in both mixed and partial load varieties. 

While we continue to build on such historical demand and established levels, we fully expect this pace to continue to push further into June. As long as availability remains sparse, expect mills to maintain current order files of 4 to 5 weeks and continue to push pricing out. 

 


Treated Lumber

The treated market continues to show incredible strength and sales pace. We are seeing mills push material out to the stores, and stores continue to report a pace that is outstripping the speed at which mills can bring in their booking program volumes. 

At this point in time, the increase in whitewood products is going to further push the treated numbers higher. At the store level, you will have to manage your costing, appropriately balancing your new price levels with the booking program volumes you have secured from earlier in the year. 

We anticipate treated to really continue to run strong at this point on the back of the dimensional and whitewood strength. 


MSR Lumber

MSR demand remains strong as quotes are quickly being turned into orders. Unfortunately, there is no sign of an increase in production in the foreseeable future to help with this increased demand.

Mill order files remain sparse, and most mills have order files well into June. At these prices, there is hesitancy on all buying levels, and as such, we are extremely busy with LTL inquiries. The majority of our purchases are going into our inventory locations to help service these needs. 

Ship times remain spotty, and late shipments from most mills continue, so we encourage you to give your suppliers as much heads-up as possible to ensure on-time deliveries. Currently, we are asking for 2-weeks, if possible, out of our inventory locations. 


Panel Products

Summary

The panel market has not garnered much attention over the last several weeks as the focus has been more so on dimensional. A big part of this is the fact that there has been such a strong order file for both OSB and plywood, which have both really been sitting out into the 3rd and potentially the 4th quarter for new business at this point.

With all that being said, the strength remains, as do the shipping challenges. Both OSB and plywood look to continue their strong surge as we roll through the summer months.

Plywood

Plywood had yet another good week last week. For the first time in a long while, we saw Fir and Spruce priced separately, which really reflects what we have been seeing for several weeks now. 

Mills pushed file to begin this week, yet again, out now to the first part of September on Super-Bs in the west and are still sitting at early August for vans out east. Although the sales pace hasn't kept up with the ship weeks, with such a strong order file, it doesn’t need to at this point in time. 

As we roll forward and challenges remain, we anticipate plywood to continue pushing their order file out slowly but surely, keeping upward pressure on pricing. 

OSB

No changes to the OSB market, as demand continues to vastly outpace supply, pushing print up to record levels. Through the month of April, print was up $400 on thin panel and $500 per on thick panel. 

The secondary market out of reloads and distribution has been demanding strong premiums for any volume that comes up for prompt availability. Most are limiting purchases to ensure what is available is spread around. 

One major western mill was out soliciting 4th-quarter business. It seems there is no reprieve in sight for 2021. Availability is not expected to improve anytime soon.


Market Experts

Lumber is what we do! Our traders are in the market all day, every day. Let us share our knowledge with you, if you have any questions, never hesitate to give us a call.

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