20 Jun June Market Update: Upticks in Wood Products Market Predict Solid Summer
June 20, 2016
An improved wood products market bodes well for a productive summer for Freres Lumber Company.
The western plywood market has maintained its pace over the last few weeks, with good sales volumes, prices edging up by the end of last week and, in many cases, order files lengthening into July. In a level not seen since September 2015, 15/32 CD 4 ply reached 385 or higher by Friday. All welcome news to mills, as we experience a balance between supply and demand that was largely absent from the marketplace last year. Why? The short answer is that demand is a few notches better so far this year and western mills have been able to move some CC to Canada in the past couple months. Added with that are several seasonal Ag business interspersed in order files, and you come up with a much more balanced marketplace. Price bumps have been fairly modest over the past weeks, but mills are building some backbone and were testing higher numbers at the end of the week, and getting it. For the first time in a long while, the near term marketplace seems to be a bit under bought.
In a marketplace where there has been little to no speculative buying by distribution and retail yards for a long time, the recent firmness in the marketplace sparked by steady to good demand in the field has caused some buyers to do a little scrambling to secure adequate lead times on purchases. Something they are not used to doing. So, the summer building season seems to be off to a solid start and the western plywood markets are firm.
Reports indicated that pine plywood enjoyed a pick up in sales activity as well, and by midweek the market pivoted, sales came in, and mills were able to bump prices up across the board. Also according to report, OSB was trying to find selling levels and mills accepted double digit counters to get wood moved.
With order files longer than they have been in a long time, the western plywood markets will probably continue to edge higher. Buyers are off balance for now, and will have to pay the going rate for commodity sheathing. Hopefully, the markets continue to enjoy some stability as we go through the summer.