All Quiet on the Market Front

We find ourselves with another week behind us in December and we’re certainly looking forward to discussing what lies ahead as we round out the rest of the month and finish off the year.

It was as expected, a fairly quiet week last week overall. There was a growing sense that the markets across North America were entering a slowdown mode looking at the time of year and the activity levels along with the anticipation of what’s to come. Although we did hear of activity and positivity in specific markets, and it’s certainly not that there was nothing happening, the overall tone could not be ignored.

On the Canadian side, east to west, most of the feedback was that there was a real lack of interest from consumers for any strong purchasing needs. There were items being purchased and loads being covered for the immediate term, but in the same breath, there were a number of customers that came to market looking for some potential coverage and not finding what fit they were content to move to the sidelines and wait until the new year to look again.

There were some comments about a slight pickup in some US markets with a little bit of activity being reported as jobs did look to wrap up for the holiday season. It was certainly nothing that was going to have a material effect or push markets up.

Also, we did start to see a little easing in the ship weeks from some of the larger national mills, but at the same time, reports of late loads from some of these same mills showed that we continue to see a relative balance on the supply side and a lack of buildup in a material fashion that would cause a real dip in prices.

Regional mills seemed to also grow their inventory levels but we also didn’t get a sense of panic. Many were feeling that, yes, we are going to see limited takeaway through December, however, we’re continuing to see supply manage this. Most feel that we’re going to see things relatively flat and stable through December and it’s something that’s being widely accepted.

Futures show a little bit of strength early in the week, so there are some questions surrounding the uptick in that activity and whether or not that will translate into the cash market. With futures at a premium to cash, however, and the lack of activity in the cash market, we still get the sense there could yet be a bit of a pullback in the futures market.

As we look toward the rest of December it’s feeling more and more like many are going to push into holiday mode early this year and it could be a quiet finish to 2023.


Supply & Distribution Update

A quieter overall tone to the market has been evident the past week and heading into the current. Uncertainty regarding the market’s direction in the new year kept most buyers in a conservative frame of mind. Trading was limited to occasional truckloads carrying highly mixed loads to fill inventory gaps.

While mill takeaway has been minimal over the past two weeks, we are starting to see mill offering lists grow. Some items are still more challenging to source than others but the overall lumber supply in the market continues to improve. A few buyers countered mills in search of bargains, but most of those offers were rejected.

Distribution continues to drive the movement of lumber as mill direct full truckload purchases are currently less common and buyers look to cover their immediate needs. Distributors noted unusually strong sales for early December. That, along with dwindling or limited mill offerings, helped support prices at last week’s levels. As the week progresses and the holiday season is near, it is clear that distribution will see less activity.

Transportation continues to be a struggle for those vendors within the industry. As the year is wrapping up and most markets winding down, there are minimal products in the market to transport. During this slow time of year, we have seen improvements in customer service. This is coupled with the favourable weather and road conditions for transportation within North America.

Buyers remain less concerned about the transportation industry as minimal issues have occurred and lead times have been promising. We can expect strong service throughout the remainder of the year.

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Dimensional Lumber

Summary

It felt like a relatively quiet market for dimensional overall. Whether it was wides or narrows, there was a smattering of activity but really nothing exciting to speak of as we finished last week and entered this one.

2x4

We saw 2x4 print flat across the board except for a mild tick up in 16s. We continue to see 16’ holding its value versus randoms and being relatively difficult to source. The 16’ material that is available continues to command a premium and at this point, it’s starting to feel like we’re not going to see them pull back any time soon.

We are starting to see a little more availability on 4” from some of the regional mills and perhaps a little bit more competition for the scarce orders that are out there. So perhaps there is a little bit of downside pressure on random length 2x4. However, this is being led more by wholesale and distribution and perhaps not as much at the mill level.

We’re still seeing a range of mill prices with those that don’t have much to offer, holding quite firm on elevated numbers. However, we don’t anticipate those numbers being achieved in the market. The 2x4 that is being sold is likely being done quietly on a load-by-load basis with a lot more of that being cleared out at the secondary level.

Look for this to continue through the rest of December with 4” holding relatively firm on pricing but we’ll see a range of numbers where business is being done quietly in the background.

2x6

It was flat on print for 2x6 across the board and it didn’t garner much attention last week overall. We’re seeing relatively flat pricing on length distribution and again, there hasn’t been any resurgence in the strength of 6” that we may have traditionally seen due to seasonality.

We look for 6” to continue to limp along at a fairly flat tone with a tight range. However, we’re not seeing a tremendous amount continuing to materialize on lists so we don’t sense that there will be a supply glut to push prices down.

2x8 & 2x10

In 2x8 and 2x10, we did start to see a little more material on lists last week with flat pricing. Mills were open to some modest counters if you brought them reasonable business. Again, however, we’re still not really seeing enough to warrant downside pressure overall in a material way.

In a similar story to what we’ve seen for several weeks now, 8” and 10” are flat with a relatively delicate balance between supply and demand. There is not much interest from either side of the equation to get excited about sales, or lack thereof, at this time of year.

2x12

The 2x12 market is much the same as it has been over the last few weeks. There is some 12” on lists with mills not overly interested in listening too much to strong counters, but there will be some price negotiation there for interested parties looking at immediate-term 12” coverage.

There is not an abundance in the market so we don’t see much downside pressure for 12” to round out the year, which will probably stumble along flat for the remainder of 2023.


Studs

Stud demand continued to mirror more of the same muted outlook from weeks prior. As the market continues to hold flat, and seemingly at this rate for the remainder of 2023, purchasers are largely expected to hold to the sidelines. There is very little pressure to step in at this time, and nothing in the near term that would lead us to believe we will be seeing a sustained upside to come.

This cautious approach continues to see buyers place a heavy reliance on LTL distribution and mixed TL offerings, with most inquiries still expecting prompt coverage and delivery as soon as mills are capable.

With ultimately a week and a half until we see holiday-affected hours, look to fill any necessary inventory holes early this week. We are seeing somewhat of a tug-o-war develop as traders are again emboldened seeing 2-3 week order files grow, and pushing strong counters through the mills. Mills for their part, are relenting on prompt business but are still seemingly pushing back on pricing when and where they can.

Stud demand is expected to remain fleeting through the quiet holiday weeks.


MSR Lumber

With regard to MSR, please refer to last week’s update. Just kidding.

This past week saw many truss plants look to fill in their MSR needs for the end of the year and not much further. Most are indicating that they are taking the week of December 25th off and returning back to the plant on January 2nd.

With orders coming in slower than in November, most are expecting activity to pick back up in January but until then, most truss plants are completing orders that they have on the books.

There were no significant changes to mill sales last week either. Most are now quoting out to the first or second week of January. The little material that they do have available for prompt shipment is available at a small discount, but most mills are waiting until January to assess the market and see where they will have to be price-wise.

Items to keep an eye on continue to be 2x4/2x6 2100 longs as well as 2x8 MSR. Material is becoming more readily available on those items but this can change quickly.

If there is anything that you need an update on, please feel free to call anyone at CEWP.

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Douglas Fir & Larch MSR

The DFL MSR market remained quiet through the preceding week. Activity focused on covering remaining late-season needs for ongoing work and on balancing out inventories in preparation for the new year. Many mills and manufacturers are taking a slower market as an opportunity to take downtime through the Christmas week. It’s a welcome break for many after a challenging year.

Pricing remained flat overall despite minimal takeaway with a slow tone and there has been some additional accumulation on mill lists through the week. Availability in 16’ through 20’ lengths has improved somewhat but continues to command a premium. While there is more wood on the market, volumes are not at the point where significant downward pressure has become present. Mill order files currently range from prompt to three weeks out.

Inventories in the field will remain tight going into ’24, and buyers currently appear content with the slower overall pace, picking off their current needs via mixed trucks and LTL loads, while taking time to assess what their upcoming needs are as they quote on work for early Q1.

While mills continue to consider counter-offers on prompt loads, they have been content to hold at close to current ask prices on loads with shipment further out in anticipation of an early ‘24 round of buying. Buyers' ongoing need for regular resupply in the coming several weeks is also adding to that. Pricing may open up slightly in the time remaining before Christmas if activity does not pick up.


Panel Products

Plywood

Short-term needs on plywood have been met mostly with a supply of contract wood. The cash market has stayed fairly quiet. Numbers are showing some softness but seem to be solely driven through distribution and less on the mill side as they struggle to keep up with production.

Order files from mills in the west are for early January and delivery timelines are subject to availability of tallies.

OSB

OSB Inquiries have slowed over the last week, with most buyers staying put until the new year unless they have a specific project requiring prompt wood.

Western Canadian mills remain quiet on cash wood offerings with a few quoting into early-mid January. Contract wood continues to flow through the market to supply most immediate needs.


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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