As we approach another week mired in the COVID-19 pandemic situation, we continue to try to assess what is happening in our world and the greater business landscape.
The sheer volume of daily information is so much to process with regard to how it pertains to individuals and our business. Sometimes it can feel like an overload of information so we are taking a very strategic approach to communicate as a group throughout our company and with our partners, both on the mill level as well as our customers. Our goal is to understand the actual needs on the ground and how we can help serve all our partners involved in the supply chain throughout a very difficult time.
To our valued customers and partners, CEWP is here to provide you with any information or guidance that we can, based on our knowledge and our reach across industries. Please don’t hesitate to reach out to us for any questions or concerns you may have during these challenging market conditions.
Producers in BC Cutting Production Amid Pandemic Crisis
In response to all kinds of market volatility, Interfor, West Fraser, and Western Forest Products have all cut their production numbers. Production will resume as determined by market conditions.
What is an Essential Service in the Mind of the Prime Minister and can it Include Forestry Products?
The Forestry Products Association of Canada is requesting that the federal government consider the sector essential so businesses can remain in operation during the growing list of shutdowns to contain the spread of COVID-19.
The dimensional lumber market started off the week in the same fashion that we have seen recently. Mills are putting out lists with numbers that have come off from last week but still seem to be above the level at which trading is actually taking place.
Mills are certainly trying to move product, as we have heard a few mills mentioning that there is the potential for curtailment if demand continues to remain muted. In light of recent curtailment announcements, we are watching the situation very closely.
Will further curtailment announcements cause a supply pinch for those who do need material in the short term? We don’t know the answer to that but it is definitely something to keep an eye on if you are moving through material at a reasonable pace.
There is readily available 2x4 material at most mills, depending on what you need and what you are looking for. It is a matter of filling holes and finding a number that makes sense for all parties involved.
The 2x6 market has been lagging 2x4, even in this slowdown. There is still not as much available and prices are slightly below 2x4 levels.
Prices have definitely come off in the 2x8 market but there seems to be a touch more stability with the reduced volume overall.
There is not as much 10” product available from the mills so it is being consumed at a better pace with prices that have held up more than 2x4 and 2x6 have, but they have certainly come off recently.
Numbers seem to be all over the place on studs with a large disparity across producers and distributors. Any possible supply disruptions may impact the market by holding numbers up for a short time longer.
There is still a significant premium on 2x4 104 #2&btr over other items. In the face of the current crisis, this is interesting but it does not feel like it can hold up even though it has over the last few weeks. This is one to watch for if you have a need and you are waiting for an opportunity, but at the moment, it doesn’t look like the market wants to relinquish anything.
We are seeing the mills push a fair amount of treated products into the contractor yards in preparation for spring.
What is interesting is that we are hearing a lot of yards being very busy. Many individuals are taking advantage of social distancing to look after projects at home and there is a feeling that as the weather improves, we may see the treated market actually show some strength.
It would appear that the home improvement market can get a boost from individuals who want to stay home and invest in their family dwellings. This is a sector to watch as we progress into the building season. This scenario can extend into the interior renovation market as well while people look to the security of their own homes and feeling as comfortable as possible which could be a silver lining on the current situation.
Availability on MSR remains more plentiful with only select lengths showing some difficulty in availability. Similar to 2x4 and 2x6 #2&btr, truckload business is being done at discounted numbers compared to current ask levels from the mills. It is uncertain how long this will be the case as availability could change quickly with a reduction in production possible at any moment.
We continue to have fully stocked inventories and we are always ready to fulfill your MSR needs from our locations across North America.
The panel market is not immune to what we are seeing in the overall market.
Plywood is fast approaching the order file limits that had been built up prior to this slowdown. Mills are searching for business and trying to establish levels. We saw that last week with the strong drop in print that was precipitated on mills trying to find a level to entice business. However, the overall market is not necessarily interested in the numbers, but more with the uncertainty in making sure they have takeaway before wanting to step in.
With that said, the plywood market is in a position where they are trying to assess a level that will push order files out further. It appears that more weakness is ahead of us at this point in time. Remain cautious and fill your gaps as needed.
Print showed a modest decline last Friday as mills fell back on order file and a lack of activity to support a larger drop. Week over week, we are getting closer to the week of production at a major Western mill, which, when we do catch it, will see a drop in pricing. Meanwhile, a two-tiered market prevails as wholesalers and distributors look to lighten inventories and stay in front of their weekly contracts. They are willing to discount to keep inventories moving. Buyers have approached and are filling needs modestly, and through distribution to limit any excess inventories beyond what is committed or sold.
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 ground and can fill your mixed truckload needs.
See what you've missed...