We’ve reached the midway point of June and it certainly feels like we are still stuck in macro-level issues between the ongoing coronavirus fallout, as well as some political uncertainties in the US. But the markets appear to be shrugging off some of that uncertainty to show some surprisingly good takeaway and fairly positive sentiments across most sectors.
Whether we are talking about lumber, OSB, or plywood, all seem to be on fairly solid footing. There are pockets of availability on certain items but it is still a fairly tight marketplace. Demand continues to maintain a brisk pace to balance supply.
DIY Keeps Lumber Moving with People Staying Home
As the COVID-19 pandemic has resulted in lockdowns and forced people to stay at home, many have turned to do-it-yourself projects for home improvements. That trend began in April and skyrocketed in May, keeping local lumber companies busy.
Canadian Housing Market Keeps Churning Despite the Pandemic & Battered Oil Prices
Through the pandemic and slumping oil markets, home sales have found new life after a slight pause in March and April, as May saw a rise in sales of 56.9% from the previous month. This news comes after housing starts showed a significant increase as well.
US Homebuilder Sentiment Rises in the Largest Monthly Increase Ever
When April homebuilder sentiment sagged by a record amount down to a reading of 30, where anything over 50 indicates a positive market, the record spike in the opposite direction was not expected so soon. The latest numbers for June sit at 58, so homebuyers have come out in droves. There is a sign that many buyers are looking for rural locations.
A First for Mass Timber Construction in Canada with a New Warehouse in Langford, BC
Langford BC is the location of Canada’s newest and first mass timber warehouse. This type of construction is quick to complete so the warehouse is offering a fast way to begin widespread mass timber construction in the region. The warehouse will provide the area with cross-laminated timber as soon as it is completed, making it even easy and faster to build in this style.
The dimensional lumber market on print was a little flat at the end of last week. However, most mills are still reporting decent takeaway and achieving their numbers across most dimensions. There are some pockets of items where mills are willing to listen as they develop a little supply of inventory, although those items are typically harder to move, like 2x6 #2&btr 14’. The feeling is that dimensional will continue to show strong takeaway as we roll through June and into July.
There are similar numbers to start the week on 2x4 as we saw last week. Some mills are still showing sparse availability, while others have solid 2 to 3 week order files. There is not a huge quantity of very prompt material, save for some smaller regional mills, but they are still asking firm numbers and moving off loads one at a time.
The 2x6 market continues to be valued far below 2x4. We feel that there is good value at these numbers. Takeaway has slightly improved but it is not a runaway, so we would still say that 10’ and 12’ are showing plenty of strength, where 16’ material is more available at this point than mixed randoms.
2x8 & 2x10
2x8 and 2x10 are following suit from last week with limited availability from most mills, as they are asking for strong numbers and achieving these levels. We continue to see the treated market taking away a good amount of the highline grades in the wides, causing continued pressure on #2&btr. We expect this to be the case moving forward for the foreseeable future.
There is not much pressure either way on 2x12. Availability is reasonable with a little bit of caution in place as the numbers have softened over the long term, but it is expected that they remain flat at this point in time.
The stud market seems to be following the trend we have been watching over the last 2 to 3 weeks, which has seen 2x4 92s still in sparse supply and still demanding a premium as a result of the robust demand for 2x4 8’. Conversely, 2x6 92 and 104 in trims have seen a steady slow decline in pricing as availability does not appear to be an issue at this point. We are watching those trims continue to back off with 2x4 92s remaining strong.
The treated lumber market continues to struggle. In the midpoint of June, mills are doing everything they can to get product out to customers and to get more blank fibre in to be treated. There are holes everywhere, distribution pressures are severe, and we are seeing customers scramble to get coverage on anything they can. It is a difficult situation as distributors, mills, and retail yards are doing all they can to get stock out to consumers, but at this point, we expect this to continue into July unabated.
MSR remains extremely tight with sparse availability and most mills sitting anywhere from 3 to 4 weeks out. Longs are especially difficult to find. There has been an increase in activity on LTL orders with uncertainty with customer order files going forward, leading to a lot of LTL fill-in material.
In turn, it has been a balancing act to keep our inventories fully stocked for prompt availability. Most availability out of inventory sits at about 1 to 2 weeks out, whereas previously we had been closer to 3 or 4 days on mixed loads.
We encourage you to look at your MSR needs over the next 2 to 3 weeks to keep yourself covered.
The plywood market had another very strong finish to last week. We saw strong sales across both Super-Bs and vans, with that extending into the current week. We are already seeing numbers from the mills above print, so we anticipate that we will see print up again to finish off the week. Mills are reporting shipments into the first and second weeks of August on Super-Bs and vans, and are currently still off the market for railcars.
As well, mills are shipping a week, and at times, up to a week and a half behind to certain areas. So it’s a good time to look at your plywood needs and to think about the summer months. We are talking about new products that are expected to potentially land in the middle of August, so our concern is for those customers who don’t look far enough ahead, leaving themselves short. If there are any types of additional supply disruptions throughout the next couple of months, that could certainly cause problems.
The market feels very stable, and we would definitely suggest taking a look at your needs a little further out than you normally would at this point in time, due to the order files.
It has been another muted week as buyers digest and await shipments of loads that were purchased 2 to 4 weeks ago. Order files are still stretched out, as they currently approach 2 weeks for the nearest order file for production. It does, however, still feel like buyers will have to step in to cover needs further into July.
There is a pinch point on sheathing right now, which is 3/8 and 7/16. Mills are pushing back against straight sheathing orders looking for more value-add, whether it’s flooring or enhanced edge product. The supply chain has a low inventory of sheathing at the moment and buyers are scrambling to cover off those needs.
Looking forward, we anticipate buyers coming in the next week or two, and we will probably see OSB continue to remain flat over the next few weeks.
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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 ground and can fill your mixed truckload needs.
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