Record Panel Product Levels With Shipments Into the Fall

As Canada comes back from the August long weekend, we are faced with a market that continues to show nothing but strength with a lack of supply and a demand curve that remains unmet to try to find a balance across all products.

We saw print up aggressively again on lumber to finish last week, and as this week begins, we are seeing very limited availability from the larger mills, with some of the more regional mills showing sparse offerings with numbers continuing to push up and out.

The market is causing some frustration, whether it’s at the distribution level or down at the lumber yard and end-user level, as many are trying to make sense of this market. These numbers and a lack of supply are really putting a lot of pressure on businesses. It appears that we are in this type of market for the foreseeable future as August is wrapped up and we are starting to look into September on a lot of products. So please reach out to us with any questions or concerns and we will do our best to offer guidance.

These are extremely challenging times as we are faced with a market that many have never seen before. As we discussed the 4-star season in 2018 over the past few weeks, we can confidently say that this is much different. So in light of that, if you do have any questions, please reach out to speak to your trader. We are always here to help and discuss any of your needs.

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Dimensional Lumber

Summary

The dimensional lumber market continues to run unabated. Whether it’s 2x4, 2x6, or the wide-boards, it is extremely challenging to find what you need, and if you can, expect to pay a significant number if it is mill direct, and a very high premium out of distribution. Everyone is trying to cover their immediate needs.

2x4

In 2x4, we continue to see the leader of the pack with no signs of slowing down and very limited availability. The 8’ material still shows a strong premium, however, random length loads of any tallies are getting scooped up quickly as soon as they hit lists. Expect this trend to continue with very little showing to start the week at any mills.

2x6

While 2x6 continued to play catchup, it is following suit with 2x4 as far as showing limited availability across all lengths. A dog in the random profile, 14” is still certainly trading a little lower than the other lengths.

2x8 & 2x10

There is not much to speak about at this point on 8” and 10” material. Mills are running where they can and product is being snatched up on a pre-sold basis ahead of runs. If anything does hit lists again, there is much more demand than supply at the moment.

2x12

The 2x12 market is a smaller market segment and in this current era of unabated demand, we cannot acquire 2x12 product quickly enough. There simply is no availability showing out there.


Studs

Stud availability has tightened significantly with long order files and limited offerings. We are seeing prices push up significantly. Of note, the straight length price on 2x6 10’ is the most costly in 8-16, and that stock goes to cut 104s, so we are seeing a pinch on 104 ⅝ on 2x6 specifically as the candidate material goes to 10’ rather than 9’ studs.


Treated Lumber

What we saw earlier in the season in the treated market has been cleaned up, as most of the mills looked after their program commitments and are now looking at cash business on a case-by-case basis. Numbers are up significantly from those mills above and beyond where that initial business was done. It is being looked at weekly, if not almost daily, as they look at their input costs. The pinch on treated continues and looks like this will flow right through the entire season at this point.


MSR Lumber

After a significant amount of Fir running through BC over the past 3 or 4 weeks, we are seeing a squeeze on prompt supply where mill order files are touching on the end of August and into September at four-digit prices. For the time being, it is a matter of availability as price is now secondary as our plants look further out.

Long lengths in 2x4 and 2x6 2100, as well as 2x8, remain extremely difficult. We are once again urging our customers to look 3 weeks out and further as there is little to no prompt material out of inventories and it looks like this price trend will continue on for the next 4 to 6 weeks at a minimum.


Panel Products

Summary

The panel markets went through a flip-flop last week where OSB took a big step up following the activity from the weeks prior.

Plywood

Plywood printed flat. Sales and order files were out to the end of September but have now pushed into the first and second weeks of October depending on shipping.

Of note, there is now a small amount of railcar availability coming out of one of the large producers for that first or second week of October. This is a function not of more product availability, but of them finally having access to potential railcars.

Although print was flat, it was really on the back of continued sales. Mills were happy to push order files further out at these levels. There certainly is still some caution out there as purchasers are trying to wrap their heads around purchasing that far in advance for their plywood needs. However, shipments are already several weeks behind production and with files into October, we don’t see pricing coming down through summer and into fall.

OSB

A perfect storm of reduction in supply brought on by a number of curtailments through last year was seemingly overdone on pulling the material off the market. This coupled with expected downtime coming from a number of producers as well as some COVID related staffing issues in the south has led to a real pinch in supply, which is being far outpaced by demand at the moment.

We were seeing triple-digit increases last week and the week prior. So we are certainly reaching record levels for OSB with shipments not likely to be seen until October. Prompt availability is extremely difficult, where LTL and distribution have been picked clean of anything prompt. So it looks like we are well through October, if not the balance of the year, in this market.


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