What Will the Market Look Like Rolling Into Fall?

It is certainly a time for pause for many individuals across the North American markets as we are getting plenty of mixed messaging through many of the product lines we deal with. As we couple that with the overall markets and some of what we have seen in the stock markets, many people are scratching their heads and trying to make determinations on what the market will look like rolling into fall.

We have seen a futures market pulling in the focus of many people over the past couple of weeks with some wild volatility and a strong pullback into November, leading many to feel that there is an inevitable price decrease coming. However, many mills are still showing a decent order file and holding on to prices. With that, we are seeing two opposing forces battling it out right now in the overall market.

 

Make Your Purchase Decisions Based on Your Business Needs

We realize this is a very challenging time as we have reached what appears to be a precipice in the market. Things have certainly plateaued on the lumber side and it appears that we are starting to see some pullback. One note of caution is that there is definitely a lot of information out there, as we indicated between what we are seeing in futures and trying to discern that and cut through it as well as what we are seeing in the cash market, with mills that have prompt wood and mills that have a file into October. It can be a lot to unpack.

Individuals need to make decisions based on their own business, so if you do have any questions, we would be happy to help you make those decisions, whether it’s the right time to purchase or potentially the time to hold. So please reach out with any questions as we are always glad to assist.

 

Contact Our Team Today

 


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Dimensional Lumber

Summary

The dimensional market has over the past couple of weeks found a lot of separation, whether you are looking at national mill systems, regional mill systems, the distribution level, as well as the futures market. There are many different facets to look at and discuss, and we are seeing prices at a variety of levels across these segments.

2x4

In 2x4 #2&btr, we are seeing prices at some of the larger mills holding firm with some pullback, albeit moderate, as order files continue to push out into the second and third weeks of October.

At the same time, we have seen some of the smaller mills showing up with more product available and we are starting to also see prices slide off, whether that is based on the actual ask levels or wholesale distributors trying to garner business in anticipation of prices coming off. Specifically, 2x4 16’ still shows a strong premium at this point with 2x4 8’ showing some weakness.

2x6

The 2x6 market is showing more softness than 4” at this point. Demand for 10’ material does continue to be strong, however, overall random demand is certainly a little more muted. We are seeing a bit more opportunity for some price concessions on 2x6, specifically from those mills that are producing and have stock on the ground ready to go.

2x8

The 2x8 market continues to be one spot that is showing more strength than others. Still, there is not much available and prices seem to be holding firm. We also note that the treaters are still struggling to get 8” material in for their programs, so we are watching 2x8 and expect it to hold some strength as we roll through September.

2x10

It is a different story on 10” than we are seeing on other dimensions, as it has seen some weakness over the past several weeks. It is moving slowly and there is certainly more 10” showing at mills, where we are seeing price concessions. There is softness in these numbers as they come down.

2x12

It is a similar story overall for 2x12. There is not a tremendous amount of activity in the 12” market right now but numbers are still firm and quite strong. However, if a mill does have product ready for prompt and a buyer ready to take it, negotiations are certainly not off the table to find a number that makes sense for both sides.


Studs

Summary

After weeks of strong momentum, stud prices have taken a pause as purchasers look to appraise the current market direction. Mills are holding firm at current levels with order files closing in on early to mid-October. While further appreciation in pricing is not expected, meager availability should sustain the current levels we are seeing.

2x6 Studs

Echoing last week’s account, 2x6 studs appear to be the item of choice with 9’ continuing to see the highest demand. With the current lack of availability, we anticipate this to continue through the fall season.


Treated Lumber

The treated market is still rolling along at a very strong pace. Many of the yards are struggling to acquire material and a lot of projects that were expected to wrap up in the summer have extended into September. We anticipate that this trend continues and these projects are pushed into October as the treated market will try to extend itself as far out as possible this year due to the lack of supply.

As it stands, treaters are beginning to catch up and try to get product to yards. However, they are also facing a challenge in that they are running out of time and dealing with the looming fall weather around the corner.

The current situation is very interesting, as treaters are trying to assess how to come to the market for next year’s season. The retail and contractor yards are also trying to determine what kind of demand they will be faced with next year, and if it will be a repeat of the current year, with a heightened takeaway for their product and a real lack of availability.

Time will tell, but this is certainly something that needs to be watched closely. If we do see continued measures in place with respect to COVID-19, we do believe that next year could be something similar to what we saw this year with a strong demand for treated material.


MSR Lumber

We are still seeing decent demand from truss manufacturers across the country. For the most part, order files remain fairly strong and demand for Just-In-Time shipment continues to be fairly heavy at this point. At current prices, and with a volatile market, it’s understandable that people want their inventories light going into fall. This has caused an increase in demand for our inventories. 2x8 1950 and 2x4/2x6 2100 material still remains quite difficult to get for prompt shipment and we are encouraging our customers to use caution when quoting.

1 to 3 weeks on shipments of LTL material out of inventory is our new ‘prompt’. Please don’t hesitate to call your CEWP contact for any advice or for an update on pricing and availability as these can change quickly.


Panel Products

Summary

The panel market is continuing to show strong order files into November and December. The anticipation is that there is a limited upside on the numbers in OSB at this point in time. It feels like we have topped out, which is not surprising to many at these levels. Plywood does not have the same overblown feel, where numbers remain high but with any push in demand coming from US consumers, we could see things creep up even further from here.

Plywood

Plywood is now pushing into the first week of December on Super-B shipments. Vans are into the third week of November and railcars continue to be off the market as a form of shipment.

Strong sales last week and a reassessment of order files lead to the current ship weeks. Mills continue to report strong takeaway and strong demand on both the Canadian and US side of the border.

With plywood out this far, a strong argument can be made that we will see plywood roll through 2020, and people’s eyes will start to turn to the spring of 2021 once we get into the new year. The concern is that we do not want to be faced with the same shortages as we run into next year’s building season as we were faced with this year.

OSB

In OSB, it has been a quieter tone on the market this past week. This is mainly due to the lack of availability from mills as one of the major producers remains on the sidelines at this point, while most of the others are only selling out on a PTS basis into November.

Prompt availability for OSB remains non-existent and anything out of yards, if it is for prompt, will come at a significant premium.


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