The Lumber Market Remains Firm & Active

We start the week with the same sense of an overall firm market. We saw a tremendous finish to the week last week once again being reported by mills, with strong takeaway on the US side, as well as a Canadian economy that has stepped in to cover off needs bit by bit. The numbers continue to march up in a steady pattern. 

The feeling that this market will continue to remain tight seems to be more accepted as the weeks roll on. Customers that were much more reluctant to cover off their needs, feeling that the increase in numbers is not sustainable, are now coming back to the fold looking to purchase for their upcoming takeaway.

As mills continue to push their order files out, confidence continues to grow from the supply side that these numbers will not pull back prior to the end of the year. There are some who continue to urge a degree of caution, as we have not been hit with any weather issues yet, and as history has shown us, that can prove to be a significant determining factor that slows down the market. With that said, it certainly feels like there is enough on the demand side to continue to hold things steady as we finish up 2021.


Supply & Distribution Update

The market has remained active with steady sales from mills and out of distribution. Mill order files continue to extend into November and availability of prompt mill direct loads has become the exception to the rule. 

Availability of material from mills remains slim in MSR, (particularly in longs), J-grade, and appearance grade. The continued effects of curtailments in production from mills, high log costs, labour shortages, a productive fall building season, and renewed activity on projects sidelined during the spring run-up are driving the challenges in sourcing material across species.

Mills are likely responding to a rising market by quietly stepping up production, but we have yet to see that material present itself. 

The movement of lumber out of distribution continues at a steady pace as buyers cover short-term material requirements on an as-needed basis. LTL deliveries out of CEWP reloads are booking shipments into the beginning of next week. 

While delays and increased costs in transportation from labour shortages and increased fuel costs have had many eyes watching, current reporting indicates that material is moving unhampered from Canadian mills through the North American supply chain.

CEWP is in the process of relocating our reload in the lower mainland to a more advantageous location for meeting our and our clients’ needs. We look forward to continuing to provide excellent material and service from our new location.

Contact CEWP Today


News We Are Following

Tree Icon

Are Surging Lumber Prices Good or Bad News for Home Depot and Lowes?

Parkev Tatevosian - Motley Fool

Through the pandemic, lumber prices have been on a roller coaster ride of volatility reaching all-time highs in the spring, followed by a pullback to pandemic lows, and now October is seeing another spike. Big box retailers like Home Depot and Lowes, who sell to contractors and consumers are feeling the effects of the wild price swings in lumber. Higher prices have led to slower sales, and in Home Depot’s case, a change in the approach to the consumer. CEO Craig Menear explains, “We always have a philosophy that we want to lead the market down and lag going up to remain as competitive as possible for our customers, and that actually created an impact which in this quarter was unique that we normally don't see.” This approach is great for long-term customer loyalty but can hurt the company’s near-term bottom line. 

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Trucking Icon

Cross-border Truck Drivers to Face Vaccine Mandate

John G. Smith - Newcom Media

Starting in January, truck drivers crossing the Canada/US border will have to show proof of vaccination against COVID-19. The border had been closed between the two countries since March 21st, 2020. Only recently has Canada eased restrictions to allow fully vaccinated Americans to cross, and the US is doing the same come November. There is concern over the mandate for truckers as some, like Wendell Erb, president and CEO of Erb Group, a cross-border fleet out of New Hamburg, Ontario, are expecting that “it’s going to be a disaster.” Erb adds, “Unfortunately, the percentage of people who are unvaccinated have no intention of getting vaccinated,” he said. “I’m already short of drivers to handle the freight I’m going to have.” This could end up pushing some people away from cross-border trucking work, causing a shortage of up to 15,000 drivers in the industry creating a logistical backlog.

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Dimensional Lumber

Summary

The dimensional market, yet again, had a very strong and robust week of sales that were reported across all species traded throughout North America. We saw print up to finish the week once again, and mills, both the larger national and the smaller regional mills, continued to report steady sales with increasing prices as the week went on. 

As we start this week, lists are beginning to develop, and again, after print being up, numbers are being pushed to new levels to test the market yet again. 

2x4

In 2x4, it feels like we are playing a broken record as the dimension led the way once again. Since 4” is the main driver of the dimensional market, it is no surprise that 2x4 is garnering much of the attention. 

We saw strong takeaway across all lengths and a good interest in 14’ and 16’, where there seems to be a bit less production available, leading some customers to scramble to cover their immediate needs. We look for 2x4 to continue to show strength and mills to try to increase order files and push prices up modestly. 

2x6

It was yet another interesting week for 2x6. Print pricing does continue to lag 2x4, however, we certainly saw a number of mills pushing that aside to achieve a premium on their 2x6, feeling that print levels were not completely indicative of demand. Some were reported to be successful, so we do look to see 2x6 to continue to close the gap on 2x4 as we move toward November.

Availability of 2x6 seems to be relatively tight, similarly to 2x4, but slightly better than 2x4 overall.

2x8 & 2x10

Once again, 8” and 10” felt like they were not getting the same attention in the marketplace. We see pricing a little below levels that we have seen with 4” and 6”. 

Mills are showing a little more availability on lists for both the wides, and pricing isn’t quite as robust where customers have some more power to put business together at mill levels. In certain cases, customers potentially see some negotiation depending on the tally.

2x12

With respect to 2x12, it is still not gaining much attention in the marketplace. At this point in time, it is the narrow dimensions that are of interest, with 2x12 languishing while the rest of the market continues to strengthen overall.


Studs

Stud pricing continued its sharp upward trajectory as persistent demand and tighter availability remained evident this past week. Robust, steady sales have pushed mill order files well into November on most items. 

Limited mill offerings, especially in #2&btr and the ever-elusive 9’ trims, had purchasers stepping in looking to cover Fall needs sooner than anticipated. Buyers still feel timid with the general market but don’t want to be chasing a 3 to 4-week order file to cover their near-term requirements.

This week, expect studs to continue building on this established trend. As long as demand remains strong and uncompromised, expect mills to keep probing the market with double-digit increases and limited supply. 

Look to cover your stud requirements sooner than anticipated.  


Treated Lumber

As we approach the end of the active treated lumber season, there isn’t much to report with respect to current takeaway. As we’ve noted in the past several weeks, one of the larger concerns has been the remaining stock at the retail and contractor yard level as the season finishes off. 

The increased pricing in whitewood is giving some hope that we will see a more firm tone to numbers as we look to the 2022 season. As the prices have appreciated in whitewood and demand has remained quite strong, this is giving the treaters and the producers more confidence that they will be able to hold up and achieve stronger numbers. This is a positive sign for those sitting on treated material that will be looking to turn their existing supply in the new year. 


MSR Lumber

Mill lists continue to show very little available as mills struggle to catch up with demand. Prompt material is in high demand from most truss manufacturers as a fall push continues with the warm weather. 

Most mill order files are out approximately 4 weeks on 2x4 and 2x6 2100 with shorter lead times on 1650. The #2&btr is seeing some significant increases, and 1650 is seeing moderate increases in pricing. We are seeing that gap narrow, and 1650 is starting to become a viable alternative for more jobs. 

We continue to buy most of our MSR for our inventory locations to supply these prompt requests. Please contact us for any of your MSR needs over the next 4 to 6 weeks as we do not see a drop in pricing projected over that time frame.


Panel Products

Plywood

The plywood market printed flat again for yet another week. We have seen the market struggle to gain any upward momentum as mills are selling week to week, holding on to a reasonable order file, but certainly nothing strong enough to give them the opportunity to push prices up. 

With the rest of the market strengthening, as we’ve seen, it certainly is frustrating for the plywood producers, who have not been able to achieve the same level of success. 

As we’ve indicated before, plywood pricing has been good, and mills are not overly satisfied with these levels as a return, so we do anticipate the mills holding at these levels with no incentive to move down. Takeaway seems to be relatively balanced.

Look to cover your plywood needs and feel comfortable. Shipping should arrive within that 1 to 2-week time frame.

OSB

The moderate pace in the OSB market continues this week, with mild price gains on sheathing and flooring. Order files are established and well into the back end of November. We are expecting OSB pricing to continue its soft creep upward over the next 6 to 8 weeks toward the back end of this year. 

Open market cash offerings have been limited. Contracts for distribution and secondaries are, for the most part, allocated with end-users having to survey available options in some cases, piecing together their full needs from multiple sources. No change is expected on this front for the balance of the year. 


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.

Contact CEWP Today

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