Something Has to Give to Move This Market and it May Come from the Supply Side

Welcome to the first newsletter of June. As we indicated last week, we wrapped up May, unfortunately with more of a thud than anything else with the back-to-back long weekends and very little uptick in demand.

We would love to suggest that as we turn a new page on a new month there will be a new feeling to the market and a fresh air of positivity about the increase in demand as we move deeper into spring. However, early sentiment indicates much the same as what we’ve been seeing for all of May.

The lack of an increase in demand continues to mire our markets in this situation that doesn’t seem to want to find any catalyst for improvement. The comments continue to come in from our consumer base that although there is business to be had with glimmers of an anticipated positive uptick, overall, there is simply not enough happening in the marketplace to merit any real growth or steady takeaway.

The feeling remains that there is more than adequate supply in the hands of the contractor and retail yards, as we move up the supply chain, the wholesale and distribution market seems to be fairly supplied as well. They also continue to try to move their positions. Moving further up, when we look at mills, enough is being produced to meet the demand levels. Unfortunately, it’s probably more than enough.

This is continuing to keep pricing flat to down in most regions, and although we are hearing that mills are frustrated with the mill returns with many operating at or below break-even levels, we haven’t seen something give at this point.

When we speak to the mills in this unfortunate situation, a lot of the comments that keep coming up are simply that. Something has to give. Once again, it feels like it will be a supply-side impact that will do something with this market. That anticipation continues to permeate. Although that could be the catalyst to help drive some momentum in the market, it’s certainly not instilling fear of missing out from customers.

At the same time, forest fire woes or the threat of potential strikes are simply being pushed aside as the fundamentals in the marketplace remain unchanged.

Supply & Distribution Update

Sales continue to be less than optimal in a highly competitive market, primarily due to the cited lack of demand. Buyers stepped in minimally to cover needs but trading was tepid at best. Mills attempted to hold the line on quotes in most items but prompt material and occasional buildups led to minimal discounts on those items.

Mills are still reducing order files but they are producing more than what they are selling. Supply continues to outpace demand and this has been reflected through unchanged pricing this past week.

Distribution sales continue to be less than ideal. Buyers have been filling their immediate needs and stocking inventory holes through LTL orders. Idle capacity is significant and common within the operations of many distribution centers in Canada.

Load times are readily available on a daily basis and lead times have been ideal for buyers. With demand still being relatively muted, the hand-to-mouth orders are still trickling through. The inconsistency in orders has not been enough to keep a steady flow through the supply chain.

The weather has been great for transportation in the past couple of weeks. All lanes and truck availability are getting covered with ease. Fuel rates and transportation rates remain flat.

The big talk in the industry is the potential strike of the Canadian Border Services. They have currently been operating without an agreement in place for about two years already. This strike is due to employees feeling undervalued and under-compensated for their efforts.

About 90% of workers are considered essential so the borders can not close entirely. What the workers have implemented is a “work to rule” so essentially employees will be doing their jobs extensively and they may potentially make clearance a more time-consuming and difficult process. Both rail transportation and the Canadian Border Services have voted to strike, but either strike has yet to occur.

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Dimensional Lumber


The dimensional market continues to feel sour as the lacklustre demand just rolls from one week to the next.

We saw that after a few weeks of flat to even a little bit of an uptick on print, we retracted back last Thursday with some negativity creeping back into the numbers.

Overall, regional mills continue to produce and are struggling to find adequate buyers to take the production and move it into the field. They are pricing much of their material above print levels trying to hold premiums. However, that does seem to be getting more challenging as some of the shorting in the market, or perhaps some with positions downstream from the mills continue to get a little more aggressive. So we are seeing downward pressure from the regional mills in that regard.

When we look at some of the national larger-scale mills, it’s much the same as we’ve seen over the last several weeks. Mill lists can be robust in certain cases, and spotty in others, but again, there is more than adequate supply available and a lot of the pricing is being tied very closely to print.

There was a little bit of pushback in the previous couple of weeks as some mills tried to stand firm on their order files with respect to counters. However, there seem to be a little more counter opportunities creeping back into the market as we start our current week. This is following the overall sense of continued persistent negativity and consumers feeling that there could be opportunities for those who need to make purchases.


Print on 2x4 was down overall and we saw negativity on 10’ through 16’ with the remaining lengths printing flat. This didn’t come as much of a surprise to most given the previous week’s activity.

As we start our current week, it’s the same situation feeling flatness trying to be held with a little bit of a downside push from those attempting to secure reasonably prompt material.

We see the 2x4 stagnation remaining at this point. There is not much to suggest that we could see it reverse course over the coming week.


Similarly, 2x6 was a mixed bag showing relatively flat overall with a little bit of an uptick on 8’ and 12’, and a downtick in print on 16s and 20s. The overall effect is inconsequential, and as we’ve said for the last several weeks, we continue to see a little less 6” available in the market but it’s still a more than adequate supply to meet demand.

We are probably looking at a flat, tight range in pricing as we move through the next week.

2x8 & 2x10

There were spotty ups and downs for 2x8 and 2x10 on a few specific lengths but it wasn’t much that led to anything.

We would call both dimensions relatively flat. Again, we repeat what we keep saying in that the wides market is slightly more balanced with the curtailment activities over the past couple of years. It is helping to sustain pricing, but again, if we look at the actual pricing levels, 2x8 and 2x20 are not faring any better than anything else in dimensional.

At this point, you can find most of what you need in the wides. There seems to be a little bit more interest and activity for mills with perhaps some customers finding potential value and treaters looking to replenish some of their stock in the wides as they get busier. This may be the source of increased positivity in takeaway.


It was another flat week for 2x12. It appears to be reasonably balanced and we don’t see numbers doing much here as they haven’t done much for several months now.

For the most part, 12” can be covered. However, the 20s are showing that the longs are difficult to source. That is one aspect in 12” to note. If you are searching for 2x12 20, they can be a challenge.


Widespread caution continued to permeate the stud market this past week as purchasers further entrenched their positions on the sidelines, yet again cynical we may see some downside movement. Most remain apprehensive about covering much more than only their near-term needs, again relying on prompt distribution channels to fulfill just-in-time inventory obligations.

Mill order files continued to hold from prompt to 2 weeks out with the more prevalent 2x4 trims, while 2x6 studs, albeit prompt on some limited lists, have been extended out 2-3 weeks with most availability pushing into late June. Prompt availability does appear to be mounting overall.

Many mills have remained committed to holding close to current ask levels and only accepting minimal counters on prompt material for the most part. However, in light of meagre 2x4 demand as of late, they may soon be forced into accepting steeper discounts to stay ahead of their mounting availability.

As this week progresses, we expect to see continued pressure for prompt LTL material and mixed truckload varieties, as many purchasers remain underbought with seasonal demand yet to progress.

While the overall market seemingly holds out for a more clear-cut and sustained direction, unseasonably quiet demand has many purchasers continuing to hold for a bottom to develop again so we expect fickle demand to remain the prevailing tone.

Treated Lumber

The treated marketplace continues to be somewhat of a bright spot in the overall market. There are reports that takeaway has been relatively good through May and into June.

We are seeing replenishment take place at the retail and contractor levels and it is certainly something that these yards can fall back on as they try to boost some of the business in other sectors.

It’s suspected that we will continue to see strength in the treated marketplace as we are in the heart of the season. The positive sentiment that we’ve been building now should carry itself through June. This will be revisited to see how the summer months will behave.

Southern Yellow Pine

Recent gains in pricing prior to the Memorial Day weekend appeared to stall as last week closed. While certain lengths were better than others, by and large, SYP MSR was met with moderate activity. There was no fear of missing out.

Remaining a bright spot, 2x4 availability has sneakily tightened. Pricing pressed upward modestly for 4” on the activity. Meanwhile, 6” and wider were seemingly readily available and we’re expecting relative stability now.

Should mills shift focus from 8” to hit the more in-demand 4”, we would see a corresponding bump in 8”.

MSR Lumber

This past week was fairly uneventful. Mills struggled to outsell their production and were definitely interested in getting material on order. Some mills even needed to get railcars moved and were listening on counters for volume. Unfortunately, demand couldn’t keep up with production and most truss plants were willing to wait to purchase.

For the most part, material wasn’t difficult to source and most lengths/grades were available for shipment over the next 2 weeks. We do feel that the downside is limited and getting at least part of your needs covered is prudent as availability can change quickly. Although there is a decent amount of material available right now, that can change quite quickly as there are a lot of people quoting the same material.

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Douglas Fir & Larch MSR

The DFL MSR market continues to hold to last week’s modest tone. End-users report positivity regarding order files but there remains little urgency to source supplies beyond immediate needs as usage is measured and availability is broad.

Pricing continues to inch lower week to week on DFL MSR. With 2x4 & 2x6 2400’s sizable premium to #2&btr, there is an indication that it may continue to dip incrementally week to week before a sustainable trading level is established. Mill order files currently range from immediate to 3 weeks out.

Some have commented that, given the volume of available material and relatively slow market activity, they’d expect to see more willingness to negotiate on pricing. While there have been recent signs that some mills are becoming more interested in liquidity on prompt loads, given that producers are skirting losses on production, a firm hand in holding near-established levels is understandable.

The supply and demand balance in the market remains weighted to the supply side as a number of mills complete a series of DFL runs. Until takeaway improves and a healthier market balance is found, the possibility of further curtailments remains.

While there is some downside currently in the market, low prices, broad mill availability and growing possibilities for counters in DFL MSR continue to present buying opportunities for those considering their needs over the next 45 days.

Panel Products


Plywood inquiry has stalled and there is minimal interest in volume in both Eastern and Western Canada. Many buyers cited current price trends are attractive but they simply do not have the takeaway to support new loads at this time. Prices remained flat on print for the 2nd consecutive week and order files were unchanged into the week of June 17th.

Contract offerings and LTL sales have been more than sufficient in covering any short-term needs in the West.


OSB sales are lagging in the West as well. Buyers with on-ground stock are mostly covered into early July. Cash offerings from mills in Western Canada are non-existent today and many buyers are concerned where they may find coverage come July beyond contract offerings.

Distribution has secured buyers on contracts well into the end of July in most cases and seems to have minimal LTL coverage as a backup in the short term.

Market Experts

Lumber is what we do! Our traders are in the market all day, every day. Let us share our knowledge with you, if you have any questions, please give us a call.

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