JANUARY 2024 BUILDING MATERIAL MARKET REFLECTION

A blast of winter covering most of North America continued to put a damper on activity. Even production curtailment announcements from two British Columbia mills couldn’t entice buyers to move off from their cautious approach to start the New Year. Despite the slow start to January an optimistic tone resonates for 2024 as interest rates are expected to continue to ease as the year progresses.

New Residential Construction Press Release (census.gov)

Canada Housing Starts (tradingeconomics.com)

Economists see ‘turning point’ in housing market this year as interest rate cuts loom – BNN Bloomberg

Minimal movement across all product lines continues as the blast of winter weather put a halt to activity, 2×4 (+1%) and 2×6 (+4%) with wides 2×8 (+3%) and 2×10 (+3%). Mills continued to hold levels falling back on order files and a belief of light field inventories will push buyers into the market. Studs followed dimensional lumbers direction with little price change. 2×4-92 5/8” (+3%) and 2×6- 92 5/8” (+2%) and 2×4-104 5/8 (0%), 2×6-104 5/8” (0%).

OSB finally showed some cracks. We are seeing some downward pressure on pricing heading into February and March as mills try to extend order files. OSB Finished down (-5%) for the month.

Plywood is showing some softness in the market as buyers have stepped to the sidelines and are relying on distribution to fill holes in inventories. Plywood finished down (-9%) for January.

Even with new orders slowing down a bit due to the weather our truss order files remain solid heading into the February and March. Supply of most EWP products remain good, outside of the one or two suppliers dealing with some extended lead time.

The supply chain continues to perform well in most product lines. We are seeing some extended lead times and delays on offshore products due to the time of year.

Looking Through the Crystal Ball

An overall softness has gripped the market as we head into February. This is not uncommon, as weather has hit most of North American putting a damper on activity. As we work through the winter doldrums there is a prevalent feeling that the North American market is underbought and field inventories are low. Combine this with the amount of mill production that has been taken off the market through production curtailments and mill shutdowns and the tipping point to an undersupplied market might be closer than we think.

FRAMING LUMBER

A cautious tone and sluggish pace, mostly weather related as most of North America felt its first taste of winter. Mill are falling back on order files with the belief field inventories are low and buyer will need to step in. Mill order files are reported into mid-February.

OSB

Tempered demand has some buyers feeling bearish as we are seeing some downward pressure on pricing heading into February. Mill order files are reported into late February.

PLYWOOD

We are also feeling downward pressure in the Plywood market as demand has waned and mills are relying on order files that run into mid-February.

JANUARY 26, 2024 LUMBER MARKET REPORT HIGHLIGHTS:

• Framing lumber markets experienced various price trends.
• Western Spruce prices remained fairly consistent after the closing of a B.C. mill.
• The B.C. mill closure led futures prices to jump considerably.
• As a result of supply concerns, many Western S-P-F counters were deduced from the market.

JANUARY 26, 2024 PANEL MARKET REPORT HIGHLIGHTS:

• Weather proceeded to be a factor in the consumption of OSB.
• Production regained traction while demand stayed static.
• Western plywood saw sheathing prices fall from last week.
• Canadian plywood buyers pushed to move inventory purchased over current market price.

*All Pricing is in CAD