Industrial Lumber Update
Contributed by Eric Ander, PNW Lumber
The Industrial lumber market perked up thru August, many buyers felt that the bottom was in, and took advantage of perceived low-cost lumber, to lock in prices and profits. Counters were available at the mill level and we traded significant volumes in all widths of economy between $250-275 (Midwest USA). As a result of consistent takeaway and limited supplies, mills firmed up on prices, and delivered pricing neared $300/mbf. For the most part, the Midwest has balked at higher prices, demand is healthy for buyers taking advantage of deals when they appear, or for in demand lengths (10’ and 14’), but most are staying on the sidelines when offered wood that is over their average costs.
Most pallet producers are having a hard time to pass along any price increases to the end user, and many are worried about even attempting to do so, as some competing manufacturers are hungry to win new business. The California and Mexican markets remain busy, and many reporting a shortage of economy lumber, especially in 2x6 and wider. Recent mill curtailments and closures are starting to affect the amount of fibre in the market. We are seeing much more Canadian SPF Economy enter into CA/MX which is usually a bullish sign in general for the overall market. This is helped in part due to historic lows in trucking rates, which is allowing wood to flow to areas that are not usually competitive. The cut stock market has completely rebounded, with most manufacturers running a 3-4 week order file.
Pricing may get tricky in coming months, if mills try and raise prices as a result of limited supplies of economy and #3. That is a big if, however, as they may be content to keep the wood moving at these levels. We are having a difficult time keeping anything in inventory, both on the manufacturing and wholesale side, a little breathing room would be welcomed. Our prediction for the next month, flat to slightly up, take advantage of deals and premium lengths when available.
All the best,
Eric Ander - (604)-910-1348 [email protected]
Brett Festerling[email protected]
Roberto Gonzalez-Milroy [email protected]
Kevin Keresztes [email protected]
WPM
September 2024