Positivity and Activity Heat Up But Caution Remains With Little Downside Risk

There is a little more of a positive tone as we finished last week and started our current week in the lumber market. We could sense a bottom approaching even prior to last week, as numbers were continuing to soften and the rumblings within the larger market were that there was demand built up with customers starting to feel that there was certainly value in making some purchasing decisions. 

We saw last week start off slow but the momentum certainly did build throughout the week. Takeaway was noted to be better across the vast majority of products, and across most segments on both the Canadian and U.S. sides of the border.

Mills, both at the national and regional levels reported a much better sales pace. However, it is worth noting that a lot of the sales activity continued to be at discounted levels as mills listened to counter offers to move prompt product and attempt to build order files. 

As last week finished up, many felt that we had reached a bottom in several parts of the market and mills were cautiously more confident in their positions to start this week. 

We saw print down to finish the week, however, it saw a much more modest decline than we had seen over the last couple of weeks. This perhaps indicates that if we do see some continuation this week, we may get to a flat print by week’s end. 

On the sentiment of positivity, it should be noted that it is certainly a cautious feeling. The purchasing that did happen was necessary and many customers noted that their inventories were lean. However, we’re still not seeing robust demand or takeaway in this spring market. Concerns continue regarding the overall health of the marketplace and whether we will be able to see enough takeaway to try to balance off supply. 

Conversations around further curtailments and the potential need for those stoppages to keep the market in balance lead us to believe that we’re still not in a healthy market overall. 

As we look to the rest of this week, we anticipate a modest tone. There doesn’t seem to be any indication that we’ll see a continued buildup of takeaway. However, more mills will probably be content with a modest continued takeaway to finish off the week with, at best, a flat print.

Supply & Distribution Update

Buyers showed a bit more willingness to purchase as prices hovered near reported breakeven levels in some producing regions. Interfor announced production curtailments between May and September that would reduce output by 175 million board feet. Demand remains unchanged, but more buyers stepped in to cover near and medium-term needs with a perception of minimal downside risk. 

Prices fluctuated throughout the week but discounts available in early trading were more difficult to source later due to supply. Demand has had a slight uptick as customers feel comfortable purchasing at these current price levels. That being said, supply is still outpacing demand. 

Items available for prompt shipment are still being discounted compared to their published price. Anything quoted 3-plus weeks out has had firm pricing attached to it.

Sales and shipments of LTL business have picked up out of the distribution centres. Reloads and inventory yards have been accommodating to the inflated activity. 

Within this soft market, buyers are being forced to bring committed purchases into distribution due to the lack of demand. The market continues to be highly competitive and price-driven. Low-priced materials are being offered out of distribution as suppliers strive to sell their less cost-effective items currently on the ground.

Truck availability remains abundant within North America. Very few lanes require extended lead times due to truck availability. Transportation rates and fuel surcharges have remained unchanged over the past couple of weeks. 

Making sure core carriers are staying busy remains the focus of transportation departments while onboarding new carriers is almost non-existent. Key performance indicators allow for reduced lead times by using the services of those organizations with the best track records.

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Sawmills, February 2024

Statistics Canada

Lumber production numbers are on the rise for February, both month-over-month and year-over-year as sawmills continue to churn out product. 

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Trade Court Orders Commerce to Redo Countervailing Duties

Larry Adams - Woodworking Network

The dispute over countervailing duties on commodities, including softwood lumber, heads to court as the U.S. Court of International Trade orders the U.S. Department of Commerce to re-examine those imposed on Canadian lumber. The order requires the department to "better explain its refusal to check whether suppliers for investigated companies had received government subsidies," based on the analysis by the legal website, Law360.com.

The ruling by the Court, Slip Op. 24-50, advises that "Commerce’s Final Results are remanded in part and sustained in part," and ordered that "on remand, Commerce shall reconsider or further explain its determination not to account for subsidies received by suppliers of lumber to the CVD expedited review respondents."

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CN, CPKC Workers Approve Strike Mandate as Possible Work Stoppage Looms

Christopher Reynolds - The Canadian Press

A strike has been authorized by employees at Canada's two largest railways and thousands of workers could walk off the job before the end of the month if a new deal cannot be reached. 

Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. employees voted more than 97% in favour of a strike mandate, which could dramatically affect supply chains in the near future. 

“After six months of negotiations with both companies, we are no closer to reaching a settlement than when we first began. Both companies are trying to strip our collective agreements of safety-critical rest provisions,” said union president Paul Boucher.

“We are at an impasse.”

“A work stoppage will impact all Canadians. It will halt freight traffic on CPKC's Canadian rail network. It would disrupt essential supply chains throughout North America and significantly constrain trade between Canada and the U.S. and Mexico,” the Calgary-based company said.

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Dimensional Lumber


The dimensional market was certainly more active throughout the week and reports were that this was felt across all widths. As indicated earlier, it was spread amongst mills both large and small, and across a variety of grades and product lines. 

Most mills did continue to listen to counter offers to move prompt available material. They also indicated that they stuck to their numbers in certain cases once they were able to build up slight order files.

We get the sense that mills will continue to push and take advantage of any momentum to try to firm this market up. However, they are being cautious not to push things up and spook tentative buyers back to the sidelines.

Consumers continue to be very cautious, feeling that there still could be some downside to this market. We will see a lot of the consumer base continue to hold tight on any further purchasing at this point.


We saw 2x4 down, however, only slightly with single-digit negativity across 10s, 12s, and 14s. Overall, there was enough activity to build in a slight stability at the mill levels. 

We are continuing to see some counter offers being accepted from certain mills, whereas others that were able to sell reasonably are pushing back and at least looking to achieve their numbers. They are still not looking to turn business away.

Availability should be positive, however, as there still does seem to be adequate product in the hands of wholesale and distribution, we could see that continue to compete with prompt mill-direct material over the next few weeks.

Stability is probably the most we see at this point as we are still not sensing much for an uptick in 4” pricing levels just yet.


It was much the same for 6”. We saw some downward pressure on 8’ through 14’ on print. Again, much of the business that was done last week was on counters at the mills. 

We continue to see slightly less availability in 6”, but this really hasn’t helped to bolster pricing at this point. Again, supply will be in the hands of wholesale and distribution with mills still looking to build file, so price stability should be seen to start the week. 

For interested buyers, there could be slight price concessions built into the market for prompt-available or 2-week wood.

2x8 & 2x10

The markets for 8” and 10” were down slightly more on print this past week. Once again, they are secondary to the overall market so demand still is not as robust as we might see in the more narrow widths.

We continue to see a little bit less on lists for active available material and there was some more noticeable demand from a lot of the customer base. However, we get the sense that consumers still feel that there could be more downside in the wides. Many are circling but not looking to step in just yet as they try to sense that maybe they could achieve better numbers if they hold a little longer.

It will be interesting to see if mills will be able to stabilize the wides. It does look like we could see slight downward pressure, but we are certainly not far off a bottom should we see some further downside there.


In 2x12, it was flat across the board. We’ve noted for quite some time now that the 12” market is not really doing much. There is relative stability built into this market as demand isn’t overly excitable. However, we’re also not seeing great build-ups from mills as they have managed to adjust production accordingly.


Stronger demand was fairly evident mid-to-late last week in the stud market. Downward pressure eased, with mills reporting an active and steady sales pace on both sides of the border.

Most producers have now dug in at their current pricing levels with order files now extended 2-3 weeks out. Many mills are again showing gaps throughout their offer lists in both Stud Grade and #2&btr and pricing discounts that were evident just weeks prior, remain marginal or have been turned away altogether. 

If decent interest persists this week, mills may probe pricing increases, but expect they will be tactical in their approach, as too much too soon and they’ll intimidate an already hesitant market.

Distribution channels are already drawing heavier interest for prompt supply on the ground. So already the market feels effectively split between those expecting further restraint, and those attentive and ready to cover their near-term needs, even if this is a short-lived trend. 

We can expect the market will remain too fickle to paint a clear market trajectory just yet. However, this recent interest has certainly set a more balanced tone throughout most trims. Having found a firmer level, expect prices to remain more buoyant through May.

Treated Lumber

There seems to be a noticeable uptick in the activity levels at the consumer base in the treated marketplace. We are only a short time away from the May long weekend, which, as we’ve indicated, is the unofficial kickoff to the season, and many of the contractor yards, as well as the mills, are anticipating a reasonable uptick in takeaway as we move through May.

Pricing is stable in the treated market at this point in time and mills are working aggressively to try to get the last of the product out into the hands of the yards so they can be ready for the increased activity expected. We’ll be watching the treated market closely and we round out the month of May as it should give an indication of the health and expectations for the latter part of the season.

MSR Lumber

This past week has seen an increase in activity. Mills have been able to move material closer to their ask levels over the last week and some items have been pushed out a little further than what was previously quoted. 

Most items have been readily available for prompt shipment over the past month, but last week we did see 2x4 and 2x6 2100 start to find a level when end-users were comfortable purchasing for their inventories. Because of this, some mills pushed order files out 2-3 weeks and got very close to their ask levels price-wise. 

Meanwhile, 2x4 1650 continues to be quite readily available at almost every mill. We have seen some price concessions on this item and expect that to continue in the short term until mills can get into better balance.

With this oversupply of MSR at most mills, we are seeing mills much more amicable to tally flexibility and we have even seen multiple items being offered on the same truck. We don’t expect this tally flexibility to continue as we head into the summer so if there is something you need for delivery in 2-4 weeks, the risk remains low to look at getting that covered.   

Although mills are showing more flexibility in tallies, there is still a quiet confidence that prices will start to increase over the next month as demand increases and the reduction in mill production starts to take effect.

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Douglas Fir & Larch MSR

The DFL market saw uneven spurts of activity through last week, but overall takeaway remained subdued. A significant cross-species curtailment announcement pushed some buyers off the fence, sensing possible value and that downside risk was further reduced. 

Most buyers came to the table interested in achieving sizable counters from mills on short-term needs. The majority were met with little interest from producers who were content to allow demand to build.  

As evidenced by the most recent curtailment announcement, DFL-producing mills are at or near their break-even points and are continuing to take a proactive approach to managing the supply side in efforts to buoy current market levels. We anticipate this to carry on through the coming weeks and months with further such announcements on production remaining possible until a notable and sustained shift in market dynamics occurs.

Printed prices on 2x4/2x6 1800/2400 all saw modest price drops of $10-$15 reflecting levels at which the week's business had been done. Supply continues to be inconsistent mill to mill with high-grade long lengths once again becoming a challenge to source. Some points of accumulation in 2x6 MSR had been noted earlier in the week but had been levelled out by the week’s end. Mill shipments continue to range from prompt to 3 weeks out.

Field inventories remain thin and cautiously managed as usage remains modest. Buyers have proven able to wait out mills' hard line on price and usage is not yet at the point of sustaining a strong upward market. Although we have seen an increased volume of work firming up in the field and anticipate that, as there remains little downside to be had at current levels, we will see a measured upward trend developing as we work through May.   

While it remains advisable to continue to cover immediate needs, it is becoming safer to feel some confidence in the market and to capitalize on opportunities to proactively cover needs beyond the immediate in the coming weeks.

Panel Products


Plywood saw its largest drop on Friday. Demand continues to be low across the country but more so in Western Canada where contract offerings through distribution and LTL on-ground inventories are plenty and come with a range of sell levels. 

Buyers are also working through previously purchased wood from March purchases. Although many buyers are sensing we are close to a bottom, similar to what we saw in early February, there doesn’t seem to be much pent-up demand to come along with that.


OSB is in a similar pattern to plywood in Western Canada. There is not a lot of demand for volumes at current levels and most have short-term coverage until mid-June. 

Contract offerings are moving through to satisfy demands on both truckload and LTL offerings. Numbers are at a range with most commenting that they likely would stay away until they have more takeaway, or prices make sense on smaller volumes.

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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