July 1, 2019
The commodity plywood markets have shown a bit more strength in the past two weeks. Back to back weeks of over-production sales has been encouraging, after a mostly dismal first half of the year, both in volume and price. A few weeks ago, lumber dimension markets came alive and gained $75-100/m over the space of a week. Likewise, OSB markets came alive around the same time, gaining $40-50/m in many markets. Both of these commodity group’s price movements were the result of production curtailment announcements. The lumber side had many curtailment announcements during the past month. Finally, buyers decided that it was significant enough to warrant some extra buying, and that propelled the market in a very short time period.
Plywood Mills Gain Inventory
On the plywood side, business has been better, with incremental improvement in volume and price. It appears to be sneaky decent business out there and the balance between supply and demand seems to be better, as well. My sense is that mills are in better shape, inventory-wise, than they have been for a while. All these things has allowed the market to firm a few bucks in 15/32 CD 4 ply and hold the line on price for the other thicknesses.
Warmer Weather Foretells Better Markets
Even though we are starting July, many areas of the country suffered from extraordinarily wet springs. Some areas are just now starting to dry out. As some of these areas regain some footing, there will be better product shipments into these markets, as well. This could spur some pick up in buying into these weather depressed areas as things start to recover some.
Buyers are still, mostly cautious, buying their nearby needs only. July doesn’t look unfriendly. Weather permitting, I believe we will continue to see some modest improvements in yard take-away and that should translate to some pick up in purchasing.
The commodity markets continue to be hard to decipher – and we could yet see some volatility in the summer.