The Market Sits on Pins and Needles Making it Unsustainable for Suppliers

We are at the midpoint of June already and we’ve said this in previous iterations of our weekly update, but the month continues to move by at what feels like a blistering pace. Even though the market is still struggling along, it certainly feels that day in and day out, there’s more than enough to do to try and keep up with the demands and requests being asked of us in the marketplace.

Sometimes we feel that in a quieter, slower market, it seems busier than when things are flat out as everyone is working harder to try and put that business together. It does seem to feel like that is what we are being given in our current market state.

Demand continues to struggle to keep up with the supply base in the market. Conversations have been slightly more positive over the past few weeks with many customers sensing that there could yet be a little bit of an uptick in takeaway. However, we still feel that this is not the big robust demand type of wave that will lead to a surge in pricing and a real uptick in takeaway activity as we move into the summer months.

We get the sense that at best, we’re going to see perhaps a measured move upward in demand but this does seem to continue to be more offset by supply. The supply side is really where the conversation will dominate the moment as we are coming off quite an interesting week.

There were a number of smaller announcements filtering through the marketplace all centring around supply-side reductions. Also, there were a few curtailment announcements from different mills and the conversations behind them remained the same. Current market factors are simply not sustainable for our supplying mills. They are struggling to try to find a balance between supply and demand but the demand side is not helping. With that, we are seeing supply having to pull back to try and level things off.

Current mill returns continue to be at or below cost in several areas leaving mills to make hard decisions. At this point, we continue to feel that there is very limited downside pressure on pricing but again, we don’t get the sense that an event will trigger a real push up either. So a tighter range will probably remain in the forecast over the near term. However, we’re watching closely week to week as the market feels like it is on pins and needles.

Supply & Distribution Update

Lumber supply is saturating the market. Mills continue to produce more than what they can sell. This has led to soft lumber pricing and mills welcoming any and all business. Mills are open to price counters on their listed prices but have sold little volumes. It has been reported that some mills are selling below breakeven levels to alleviate buildups.

Curtailments and other capacity reductions have done little to ignite a lifeless, lethargic market. Buyers reported tepid demand from end-users and had few immediate needs. Although lumber is currently well-priced with very little risk attached to it, end-user demand sagged, and it’s been challenging selling supplies further downstream.

Distribution sales are below average while operating with idle capacity. Fill-in orders are more common from buyers, but with advantageous lumber prices on mill direct truckloads, customers are more inclined to purchase truckload quantities.

We are not seeing distribution/inventory yards stocking up, but instead purchasing at a slow and steady pace while managing inventory levels closely. Buying has occurred for those items that are available for prompt shipment. Distribution everywhere has increased accommodations to transportation.

Transportation continues to operate with few disruptions. Trucks are readily available across North America keeping lead times tight. Fuel surcharges and transportation rates have remained flat in comparison to last week.

The previous discussion on the Canadian Border Services strike has now come to a close with an agreement being reached. As for the rail strike probability, no agreement has been made. Rumour has it that a strike is likely. Rail is not an essential source of transportation as there are many other substitutes. If services are deemed non-essential, it is more likely a strike may occur. Based on past instances, if a rail strike does occur, we can expect extended lead times until an agreement is made.

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Dimensional Lumber


The dimensional market once again felt like it had a relatively lacklustre performance through most of last week. A similar pattern to what we’ve seen continues, a very quiet start on Monday and a little bit of a feeling out into Thursday, as those customers who have some needs look to source material in a fairly quick turnaround time to keep their dimensional inventories quite lean. As we roll through Thursday and Friday, it tends to quiet down once again.

Overall, the demand for dimensional lumber feels similar to what we’ve seen through most of April and May. There may perhaps be some slight uptick in takeaway but nothing that will really cause the market to pick up and notice.

Producing mills, both regional and national, continue to listen intently on prompt material, looking to try to move that product in a timely fashion. They are certainly open to a conversion on pricing. Anything out past 3 weeks, however, most mills are pushing back on and staying firm feeling that there is no incentive to try and sell that far out at these price levels. Instead, they would rather wait and see if things can improve as they get closer to ship time. We don’t expect this pattern, which we’ve seen for quite some time, to be disrupted in the near term.


Last week, the 2x4 market came down as the week progressed culminating in print being down across most lengths. Overall, print was down just under double-digits. This didn’t come as a surprise to most, as you could sense the pressure on pricing. It wasn’t huge, but again, we continue to see quite a range in pricing on both sides of print.

Mills that fall back on being able to service your specific tally needs, as well as perhaps offering a product that is looked at more favourably from a quality standpoint, are certainly trying to hold premiums above print. However, there are still those that are looking to move product and are willing to get a little more aggressive. This same pattern looks to hold as we start our current week.


In 2x6, it was also a down week with 12’ through 20’ across the board sitting in that $5-$8 range. It’s following the same pattern as the 4” market as we are seeing availability in 2x6 as most mills in a variety of tallies and quality levels.

We continue to look at the value on 2x6 and it feels like there is certainly a lot of upside potential versus where prices could go on the downside. We don’t see much risk in 2x6 purchase and hold positions at this point. However, customers remain content to buy to their needs to keep things fairly tight in this market as well.

2x8 & 2x10

It was a different story for 2x8 and 2x10 and it has been the case for some time now. There continues to be more balance to that market and we saw both 8” and 10” flat across the board.

We are seeing a little bit of product developing on some lists, however, it does feel like demand is meeting that supply and there is some price stability built into both dimensions.

We get the sense that with the stability we’ve seen for a number of weeks now, it’s hard to make a case for a turn as we move into the end of June and open July when wides will start to retract on pricing.

The expectation is for more stability in the wides with more pressure on the upside if the pace starts to pick up.


The market for 2x12 remains balanced overall. We saw a flat print and again, there is good supply meeting adequate demand and stability moving forward into the summer months.


As with all things in the lumber market these days, purchasers have maintained a cautious approach in covering their stud needs this week. Modest interest has given way to hesitancy and reluctance, as purchasers again remain timid in reaching too far out, instead placing heavy reliance on secondary distribution.

Mill offering lists are starting to appear slightly less robust, with many currently maintaining a consistent 2-3 week order file in most trims, and prompt options largely focused on 2x4 9’. Current supply and demand have found seemingly level ground, as mills continue to hold to established pricing for another week. However, counters are being considered every day, depending on if the product can be shipped promptly.

As this week progresses, we expect continued pressure for prompt material and mixed-load varieties. Mills will continue to try to sustain pricing, bolstered somewhat by order files creeping into the coming months. The fact remains that purchasers and the overall market sentiment both appear to again be timidly holding out for further downward movement before stepping into anything decisive.

Treated Lumber

The treated pace continues to be relatively strong. Reports once again show that takeaway is good in the field, although perhaps not a runaway. It’s certainly a bright spot in the market overall.

Replenishment from the mills seems to have improved over the last few weeks, which is a good sign. We will see if this continued takeaway will carry through to the end of June and into July, or will we perhaps see a slight slowdown as we get into the summer holiday season?

At this point, it looks like good stability in the treated marketplace for takeaway and pricing.

Southern Yellow Pine

It’s more of the same this week as there remains no big threat of missing out. Upward momentum stalled and some pricing retreats became evident as mills adjusted numbers to keep material flowing with 4” to 8” backing off slightly. Wider widths remain strong in comparison.

MSR Lumber

‘Steady’ is the word to best describe MSR last week. Mills were able to continue to sell MSR through the week but not at a rate where they could increase pricing and push their order files out further than 1 week.

Most mills continue to have items available for prompt shipment (2x4 1650 and 2x4 2100 – short end) where they are willing to listen on prices. If they could ship the material in 1-2 weeks, they were willing to listen on price. If the item wasn’t available for 2-3 weeks, most mills held firm on their pricing as they continue to feel that there will be appreciation over the next 3-4 weeks.

Continuing to be a steady mover, 2x6 MSR drew small counters that mills were willing to accept while quoting material out 2-4 weeks. There is tally flexibility, but most feel this won’t last long, especially as we get later into the summer when more agricultural jobs get the go-ahead.

Truss plants continue to be steady as well. They are not a runaway by any stretch but most continue to add to their order files and are busy quoting. Although most truss plants expected to be busier by this time of year, the weather sure hasn’t helped and many believe they will be busier in the next couple of months.

If there is anything you would like to be kept up to date on regarding price or availability, please don’t hesitate to reach out to someone at CEWP.

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Douglas Fir & Larch MSR

The DFL MSR market continued to sputter along with minimal activity through the week. The downside potential on higher grades seen lingering in the market for an extended period was realized in print. Announced curtailments and price reductions did little to ignite an unmotivated market. Price discounts grew larger throughout the week.

The premium between DFL MSR against #2&btr continues to close, with 1800 & 2400 price dips ranging from -$10 to -$30 on the week. Many mills became more flexible on pricing on prompt loads, while others with limited inventories or pricing floors, based on production costs, opted to stay out of the market or pick buyers strategically. Those offering 2x8 & 2x10 MSR held near to previously established ask prices but were seen as being open to counters. Mill order files range from prompt to three weeks out.

Today’s market presents an opportunity to cover upcoming needs with broad availability and mills willing to find saleable pricing on quick shipment items, taking the edge off the potential downside which remains present. While supplies currently overwhelm demand, ongoing curtailments will take material out of the market, firming mill pricing strategies, and tightening availability.

We suggest continuing to source short-term needs while also keeping an eye out for deals further out to both capture current value and ensure coverage through the summer. While not a significant issue currently, availability may become constrained down the road.

Panel Products


Plywood supply on contracts and on-ground inventories in distribution is what is carrying the market this week. There is very little to no takeaway on cash volumes at mills in both the East and West. Buyers have been satisfied filling in holes on less-than-truckload volumes.

While price levels are at the lowest we have seen since mid-May, it’s not enough to pull buyers off the fence on volumes as they simply do not have any significant takeaway at this time.

Order files remain at the week of July 1st and mills are listening to offers for volume.


OSB had its largest drop since early February last week as producers looked to the U.S. to move off some volume builds. While inquiries have picked up in the Canadian market since the drop, buyers with low on-ground inventories remain cautious, citing that more has to come out of current levels.

Lack of availability persists in Western Canada on cash offerings and order files with most Western producers are still into late July. One producer also has upcoming downtime out of one mill starting in late July.

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