With Abundant Supply of Material Available, Where Will Demand Balance Out the Equation?

This is the last newsletter for June and comes as many across North America with children in school and University are wrapping up another year. The official kickoff to summer is truly underway and with it, a lot of excitement about the chance to enjoy some nice weather, perhaps some summer travel plans, and some much-needed vacation time.

A lot of positive sentiment can surround this time of year looking forward to July and August and the hope is that perhaps somehow we can take some of that positivity about the summer months and what it means to individuals and relay that to the lumber market.

The unfortunate reality is that as we start our current week and wrap up the month of June, we can go back through most of May and even earlier than that to paint a picture week by week, and now month by month, of a market that has had the same feel for quite some time.

We continue to see an overall struggle to find balance in this market. However, when you look day-to-day at individual locations and customers, there are pockets of activity. It’s not that it’s doom and gloom floating around everywhere. There is a market and a need for the consumption of fibre and depending on where you’re looking, at times it can appear quite good. But we continue to come back to the fact that we’re out of balance and there is just simply an overabundance of supply that is not matching up with demand.

We saw this again as we finished last week. Pricing pressure remained in the market and although we continue to feel that the downside is moderate from a risk standpoint, numbers are still being pushed down ever so slightly. This is not at every mill and if you go on a case-by-case basis, some are willing to hold firm, yet there always seem to be others that need to do something to try to alleviate inventory pressure.

Overall, it’s difficult to imagine a scenario where demand suddenly becomes stronger as we move into the summer months to help bring this market back into balance. What we’re expecting is the inevitable movement from the mill side to look at further supply reduction, be it temporary curtailments or perhaps another major announcement from a mill system. We simply cannot continue to move forward in this same vein, as mills are struggling with profitability on a day-to-day basis and these challenges are not dissipating.

This is not unique to one area as we are seeing these challenges throughout the North American market, whether it’s the Western SPF, Douglas Fir, or the SYP markets in the Southern United States. We are simply over-supplied.

Supply & Distribution Update

Inventories certainly seem more than adequate across both mills as well as the distribution marketplace. For the largest moving products, primarily 2x4 and 2x6, we continue to see supply outstripping demand with an adequate supplied pipeline right from the end-user yard level all the way through distribution and up to the mills.

One area of positivity for the market is that we have seen some of the specialty, higher-grade value items become a little tougher to source. As mills continue to take production off, those items that are produced with less frequency or volume are being affected faster. We are keeping an eye on this as it is an indication that there is some balance trying to be found in the marketplace.

Business out of distribution continues to be very aggressive as there are many battling for scarce orders on a day-to-day basis. We are seeing yards relatively well stocked and traders looking to lighten positions, taking the approach of using aggressive pricing structures to do so. Again, we’ve seen this pattern for some time now and don’t anticipate much change.

Transportation and logistics through the supply pipeline are certainly more than adequate. Conversations around the potential CN strike continue to loom in the background but product flow is moving quite nicely east and west as well as north and south.

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Union Voting on Whether to Extend Strike Threat by CN, CPKC Rail Workers

Noi Mahoney - FreightWaves

A second strike vote is being organized by the union representing more than 9,000 CN and CPKC workers as negotiations with the rail companies have gone cold.

The vote by the union began Friday and will run until June 29th with the existing strike mandate expiring on June 30th.

“It is unlikely the parties will be in a position to initiate a legal strike or lockout before mid-July or later. In any event, a legal strike or lockout cannot occur until at least 72 hours after the CIRB renders a decision,” CPKC said.

“We have no indication how long this process will take, or what an outcome could possibly look like,” TCRC said. “The result is a frustrating process. Both carriers have completely withdrawn any commitment to negotiate since the referral was issued, which already was almost non-existent since the sessions began last fall.”

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Industrial Product and Raw Materials Price Indexes, May 2024

Statistics Canada

Products manufactured in Canada saw prices stabilize from April to May, although year-over-year numbers rose 1.8%. Raw material prices dropped 1% over the month but increased by 7.6% over this time last year.

Meanwhile, lumber prices, along with other wood products, also declined by 4.9% month to month in May driven by a steep drop of 10.2% for softwood lumber. This measured as the largest monthly decline for softwood since June 2022 when it fell 29.4%. With housing affordability issues persisting, demand for lumber has softened in May.

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U.S. Single-Family Housing Starts Fall in May


With mortgage interest rates remaining high in the U.S., homebuilding for single-family housing fell by 5.2% in May. Meanwhile, future construction permits also dropped 2.9%.

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Dimensional Lumber


The dimensional market, once again, certainly struggled last week. It felt that way almost from start to finish. The futures market took a big spill at the end of the week, catching many by surprise not anticipating such a strong downward push. This set a new feeling of pessimism in the market and buyers who are already leery of taking too long of a position with dimensional are going to continue holding back to a very near, just-in-time system of purchasing on this move.


The 2x4 market found itself down on print across the board, save for 8’. We saw modest downside pressure on a number of lengths and low-double-digits on a couple of others.

Similar to the pattern of what we’ve seen in 4” for quite some time now, national mills are moving pricing down ever so slightly in lock-step with print. But also, some of those mills are starting to pull back on quoting much farther out than 2 to 3 weeks, feeling that there is no sense in trying to lock in future sales at aggressively low numbers.

Regional mills continue to try to move inventory on a case-by-case basis as a certain mill on one day will listen to counters but once they move off a position to find some breathing room, they certainly have no interest in taking on additional business at those levels.

We look for 4” to continue to struggle to find traction as we move through our current week. Unfortunately, there is likely some more downside pressure to be pushed through from the broader market as we move through the week.


Also feeling the downside on print was 2x6, we saw a double-digit downward move on 12’ and 14’, with modest downside pressure on the other lengths.

Moving in a similar pattern to 4”, we don’t see much difference between the two dimensions. Again, there is adequate supply in the market through the mills and distribution.

More of the same should be felt on 6” as we round out the week.

2x8 & 2x10

In the 2x8 and 2x10 markets, we are dealing with a smaller part of the overall market, as we’ve noted before. Over the past several weeks, as a result, they have perhaps been affected a little more by the curtailments and so they had a bit of a positive tone overall last week.

Print was up modestly in 8” on a few lengths and flat in others. Meanwhile, 2x10 was up modestly in some of the short lengths, although it was down on 18’ and 20’.

What we’re seeing continues to be the trend of a more balanced 2x8 and 2x10 market. We are noticing a little bit of product on mill lists, so perhaps the supply/demand balance that has been achieved could start to be affected if some of those lists don’t stand out over the next few weeks. However, we don’t see much immediate downside pressure in the wides due to the balance over the past several weeks.


Once again, 2x12 was flat across the board. As we’ve stated for some time now, it feels like a balanced market for 12” without much else to note there.


Stud demand continues to weaken as purchasers remain firmly on the fence yet again this week, reluctant to cover much more than only their current 1-2 weeks needs.

Downward pricing pressure has permeated all trims. Mills continue to discount across all available stud offerings, keeping in lock-step with the sharp decline throughout dimensional lumber.

With order files not firmly into July, mills remain open to steep counters and offers in a bid to entice any interest. Purchasers tempted by the recent dip in pricing and looking to step in and replenish woefully thin inventories, should see prompt options continue to develop throughout the week.

This week we can expect continued softness to be the prevailing tone, as the market again holds for a bottom to develop amid unseasonably quiet demand.

Treated Lumber

The treated market continues to feel like one of the brighter spots in the markets overall. Reports from the contractor and retail yard remain strong with reasonable takeaway and some challenges to replenish stock fast enough to meet that demand.

Mills are quite content to try to get product out as fast as possible into these yards to replenish material. We see price stability holding at this point due to the reasonably strong takeaway.

There has been a note that some suppliers are continuing to struggle to meet some of the demand for certain products. As we finish off June and move into July, this is of some concern as we are getting deeper into the season. The hope is that they can deal with these supply chain constraints sooner rather than later. We don’t want to see these issues roll all the way through to the end of the season.

Southern Yellow Pine

Supply remains relatively good for SYP MSR. With a holiday set to open next week, we’ll see some mills closed for a few days to take a little extended long weekend. Perhaps more symbolic of the supply imbalance, this isn’t expected to have a major impact on supplies or pricing.

It’s been relatively flat in SYP MSR, outperforming #1 and #2 the last few weeks and hanging on to a premium. It’s looking like it will continue this way for a bit until supply rectifies itself.

MSR Lumber

There wasn’t a lot that changed over the past week with regard to MSR. Mill sales continued to be slower than they would have hoped for and most continued to search for prompt shipments. One item that proved difficult to source as last week progressed was 2x6 MSR. Although we didn’t see a large price appreciation, availability was definitely scarce.

By the end of the week, most mills were either off the market on 2x6 1650, or out over 3 weeks on shipment. However, 2x6 2100 was a little better with availability only being out 2-3 weeks, which we started to see tighten up as the week went on.

Meanwhile, 2x4 MSR was much more readily available, especially 2x4 1650. Most mills were trading off their price lists on 2x4 MSR and offering prompt shipment. The only exception continues to be 2x4 2100 18s and 20s. Although they aren’t scarce, they also aren’t plentiful. Previously, mills were only able to offer 1-2 longs per truck, but currently, they have been able to offer 4-5 longs per truck if you are a little more flexible on the ship time.

Advice that we can give is to have flexibility on your ship times and tallies. If you have that, there are ‘deals’ available. Please don’t hesitate to call or email anyone at CEWP for pricing and availability.

Contact Us for Up-to-Date Pricing & Availability

Douglas Fir & Larch MSR

Activity in the DFL MSR market remained muted through the preceding week resulting in further dips on printed prices, discounted material on mill lists, and broadening acceptance of counters as mills search for levels to entice sales.

The premiums between high-grade DFL against #2&btr continued to narrow, with 1800 & 2400 dipping -$10 to -$20 on the week and printed prices on 2x6 Select Struct, 1800 & 2400 setting new yearly lows.

Market levels on 2x8 & 2x10 MSR showed growing softness against weak demand and inter-species competition. Mills with prompt loads on offer remained open to pricing negotiations.

While some points of tightening supply have been noted, the potential for further curtailments and production restrictions has become a more frequent point of discussion. Demand has continued to fall short of volumes needed to hold prices, let alone raise them.

This market continues to present opportunities to source upcoming needs with mills willing to find saleable pricing, easing the potential of further downside.

We suggest continuing to source short-term needs while also keeping an eye out for deals on your needs further out to both capture current value and ensure coverage through the summer.

While it has yet to become a significant challenge to source needed material, availability is likely to become constrained as reduced production continues.

Panel Products


Plywood picked up a little steam prior to its moderate drop on Friday's random lengths print. Mills have commented this week they are not looking to drop beyond today’s levels, which are the lowest we have seen since the bottom levels of 2023.

Upcoming downtime and tightening of supply on certain items, in particular select grades, is apparent.


OSB prices have continued to drop despite extended order files and some moderate takeaway south of the border last week in the North Central region.

Order files are extended into late July with some Western Canadian producers continuing to stay out of the market. Buyers who need to fill in have been cautious and are running tight inventories with quick turns, replenishing only when needed or on a price-time-of-ship basis.

Continued pressure on weak housing markets across both sides of the border has also hampered any potential volume purchases.

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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