AUGUST 2024 BUILDING MATERIAL MARKET REFLECTION

Building Material Market Overview

The market continued to push higher through August, as buyers worked to cover both immediate and upcoming fall requirements. Many also took on some extra inventory to protect themselves from a potential Canadian rail strike. With the Canadian Government finally stepping in and forcing both sides to binding arbitration, the month ended on more of a muted tone as the market digested and re-evaluated their inventory positions.

New Residential Construction Press Release (census.gov)

Canada Housing Starts (tradingeconomics.com)

Lumber continued its push upward with 2×6 and 2×10 leading the charge. Mills currently have strong order files into the second or third week of September.

The OSB market continues to be a bit perplexing. It has now been 10 weeks since we have seen any price movement and yet there is very little product available on the cash market. This is strange for this typically volatile product and has buyers a bit unsure on which direction it may go if and when it moves.

Plywood gained some traction, mostly on the heels of a potential Canadian rail strike as buyers chose to hedge their inventories to protect themselves.

EWP saw some price decreases in the East that have yet to find their way to the West. We have seen some western mills running behind on production pushing orders out an extra week or so.

Looking Through the Crystal Ball

As we head into the fall season, an old school lumber mantra has been resurfacing, “Clean by Halloween.” If this is the mindset of a majority of buyers, we could see a muted tone through September and October as the focus will be on getting inventories in line for the typically slower winter months.

Higher Canadian mill duty rates, fiber supply issues and weaker market conditions have claimed their first casualties as Canfor announced two mill closures in Northern B.C. These mill closures could prove significant to the market and may be the tipping point on the supply/demand pendulum as we move into 2025. The question going forward is will there be more mill closures to come.

FRAMING LUMBER

OSB

The OSB market continues to be a bit perplexing. It has now been 10 weeks since we have seen any price movement and yet there is very little product available on the cash market. This is strange for this typically volatile product and has buyers a bit unsure on which direction it may go if and when it moves.

PLYWOOD

Plywood gained some traction, mostly on the heels of a potential Canadian rail strike as buyers chose to hedge their inventories to protect themselves.

AUGUST 29, 2024 LUMBER MARKET REPORT HIGHLIGHTS:

Trading overall took a step back from previous weeks, as buyers digested recent purchases and evolving economic developments amid the virus pandemic. Prices of framing lumber were mixed, with recent increases in Canadian S-P-F moderating, Southern Pine prices gaining upward momentum, and many sellers of western species still looking for a bottom. Led by the surge in Southern Pine, the Random Lengths Framing Lumber Composite Price posted a $4 uptick, a second modest increase in as many weeks.

• Framing lumber markets experienced a slowdown in price increases and buyer urgency following the
  resolution of the rail strike.
• Western S-P-F sales slowed as the rail strike was no longer a concern, but prices saw modest gains due to
  steady demand and tight supplies for certain lumber sizes.
• In Lumber Futures, the September contract saw minimal price movement and low trading volumes
  throughout the week.
• Stud lumber late trading saw a decrease in price momentum. Some species remained steady while others saw modest price increases.

AUGUST 29, 2024 PANEL MARKET REPORT HIGHLIGHTS:

Structural panel sales and price trends were mixed. Sales of OSB were more active, and prices ranged from firming in the north to surging in the south. A surge in demand for Southern Pine plywood that peaked in late trading supported price gains in rated sheathing and led some mills to go off the market to evaluate capacity. Western Fir plywood producers continued to run mills at a reduced rate, yet sheathing prices remained weak. Modestly stronger sales provided some optimism in the Canadian plywood market, but prices lacked any lift.

• OSB trading and prices declined across North America with minimal buyer needs beyond contracts.
• Many mills were off the market by the end of the week.
• Western plywood trading volumes decreased with some sheathing prices rising on increased sales.
• Canadian plywood prices saw a moderate increase as the long weekend approached. Market activity
  slowed, but mills negotiated higher quotes.

*All Pricing is in CAD