DECEMBER 2021 BUILDING MATERIAL MARKET REFLECTION

The lumber market continued its upward momentum through December jumping triple digits on all items. Strong U.S. takeaway and continued transportation issues were the main drivers as mills were able to establish strong order files into late January.

OSB and plywood mirrored lumber’s strong run to close out the year, with strong takeaway and tight supply look, for panels, to have a strong first quarter to the year.

Truss production continued to be strong, as it has been for most of the year. This looks like it will continue as the calender rolls into 2022, as strong market conditions and allocations continue into at least the first half of 2022.

We are seeing pockets of positivity on the finishing side as raw material that was expected months ago is starting to arrive, allowing producers to get caught up on a short-term basis with orders. We expect supply to continue to be hit-and-miss as we enter the new year.

As we close out 2021, we look back on a very volatile year caused by strong housing markets in both the United States and Canada, world wide supply chain issues and transportation challenges. This caused supply issues in almost every building material product line at some point.

Looking forward, it looks like we can expect more of the same to start the new year. Lumber, OSB and plywood markets continue to be volatile, and supply chains continue to struggle to keep up with strong  demand in both the U.S. and Canada. This strong demand looks to continue as we start 2022.

We at Star Building Materials would like to wish everyone a healthy and happy 2022.

FRAMING LUMBER

Lumber saw huge gains in December as mills pushed order files into late January on most items with strong U.S. takeaway.

OSB

OSB found traction and posted strong increases month over month again driven by the U.S. market. There is a $200/M -$300/M premium on cash market sales over contract pricing on Random Lengths Print.

PLYWOOD

Plywood found its legs and mills were able to take order files into February, so it looks like a strong first quarter to start the year for plywood.

ENGINEERED WOOD PRODUCTS

EWP will continue to be in tight supply to start 2022 as strong demand and allocations set by producers will continue to cause supply challenges to start the New Year.

FINISHING PRODUCTS

As mentioned, we are seeing supply slowly get better at times, as raw materials producers have been waiting on it starting to arrive. Producers still anticipate supply chain issues entering 2022, so we expect availability to be inconsistent to begin the New Year.

DECEMBER 29, 2021 LUMBER MARKET REPORT HIGHLIGHTS:

• Sharp double- and triple-digit price increases earlier in the month in framing lumber allowed for more measured but solid gains amid lighter trading between the year-end holidays.
• For the second time this year, Random Lengths Framing Lumber Composite Price broke through the $1,000 mark.
• The cold snap in Western Canada and the Pacific Northwest hampered mills and producers that continued operations through the holidays.

DECEMBER 29, 2021 PANEL MARKET REPORT HIGHLIGHTS:

• Cold weather and year-end holidays slowed structural panel markets.
• Heading into the new year, we see a continuation of supply shortages and transportation issues for the OSB market.
• Many traders were out of office for the holidays, leaving Southern Pine plywood sales fairly quiet.
• The same can be said for western Fir plywood market’s pace, as winter weather and holidays slowed movement here as well.
• Little was heard from customers of Canadian plywood producers in the short week between Christmas and the New Year.

*All Pricing is in CAD