The ongoing strategy of North American sawmills reducing production and
curtailing manufacturing volumes succeeded in reversing the usual seasonal
drop of lumber prices.
As November dawned, the supply-demand balance was such that lumber sellers
were able to actually increase prices somewhat. Customers have been running
on lean inventories for most of this year, as macroeconomic uncertainty made
for quite cautious business decisions. Most lumber buyers have been making
purchases for immediate needs only, not keeping any additional inventory on
hand, in the thought that lumber prices might drop further. At the same
time, lumber producers have been keeping production volumes low so as to not
oversupply the market and thus drive prices lower. These circumstances
collided at the
beginning of November, bringing prices up higher as customers needed to keep
ordering wood for ongoing building projects. Scuttlebutt continued to
indicate that sawmills were adjusting their production schedules to bring
supply more in line with persistently dull demand.
In the week ending November 3, 2023, the price of Western Spruce-Pine-Fir
2×4 #2&Btr KD (RL) was US$380 mfbm, which is flat from the previous week.
That week’s price is down by -$4, or -1%, from one month ago when it was
$384.
Western S-P-F traders in the United States had a slightly busier start to
November than they saw throughout most of the previous month. It was still
tough to get orders, but an increasing number of buyers found their
inventories lacking and current prices amenable.
There were multiple accounts of rail car buyers stepping in to cover
near-term needs.
The tightest-availability items were again 2×4-9’ studs and 2×4-16’ straight
lengths. On the other end, prices of 2×6-8’s and 2×6-16’s remained sloppy
and undervalued according to players.
Western Canadian suppliers of Western S-P-F lumber reported a much more
balanced market as November kicked off. Aside from some modest gains in
high-grade 2×6 and 2×10, most dimensional prices were flat from the previous
week’s levels. Demand wasn’t much different, though there did seem to be a
growing number of buyers who saw firming prices and decided to cover some of
their short-term needs.
Secondary suppliers continued to service customers with highly mixed
truckloads and LTL orders, often sending one load to multiple buyers.
Transportation continued to run largely uninhibited, even as the snow
started to fly in many regions.
As November dawned, prices of Eastern S-P-F plywood gained another few
points, as players expected this firmness to persist into the New Year. With
panel mill order files already into the week of December 4th, traders
wondered whether producers would decide to sell into January 2024 ahead of
their two-week holiday shutdowns. Strapped field inventories ensured that
buyers were continually looking for quick loads, which were harder to find
by the day. Oriented Strand Board sales in Eastern Canada continued to lag,
but that was more than made up for by sustained demand from a broad swath of
US markets. Discounted and prompt material that had been easy to find was
all but dried up as producers extended their order files as far out as
December 4th.
An interesting combination of depleted field inventories of Western Canadian
panel and quiet production adjustments resulted in plywood prices nudging up
several points. Rumours abounded regarding shift reductions and other
strategies among the mills. Resultant order files were out to the week of
November 27th, despite meandering demand. Meanwhile, prices of OSB inched up
amid a murky market wherein mill offerings were essentially nil. Order files
were consequently impossible to peg. In transportation, no news was good
news as cold weather descended on much of the North American continent.
Compared To The Same Week Last Year, When It Was Us$490 Mfbm, The Price Of
Western Spruce-Pine-Fir 2×4 #2&Btr Kd (Rl) For The Week Ending November 3,
2023 Was Down By -$110, Or -16%.
Compared To Two Years Ago When It Was $620, That Week’S Price Is Down By
-$240, Or -39%.
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