JULY 2024 BUILDING MATERIAL MARKET REFLECTION

Building Material Market Overview

A strong 2-3 week run of business brought a positive tone to the market, one that has not been felt in months. A combination of low field inventories, forest fires, and mill summer shutdowns pushed buyers into the market in July. As we enter August the question on everyone’s mind is, will we see continued follow through on this momentum or have buyers filled their needs and will retreat to the sidelines waiting for their next opportunity.

New Residential Construction Press Release (census.gov)

Canada Housing Starts (tradingeconomics.com)

Lumber finally gained some traction in July lead by 2×6 and 2×10 with availability of these items becoming scarce as prices pushed higher.

The OSB market is a curious one. It has now been 5 weeks since we have seen any price movement and yet there is very little product available on the cash market. Reports of mills in the West and South getting $10-$20 over posted numbers offset a week Eastern market.

Plywood also remained flat month over month as mills continue to be able to move production but are struggling to create much of an order file to allow them to push prices.

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

The biggest question in the market is will we see some follow through on July’s run-on business? As mentioned, it feels that this was driven by low field inventories, forest fires and mill summer shutdowns not by a shift in overall demand that the market has been waiting for. As mills have reported order files through August, we are now looking into September / October which historically can be very busy months as the weather starts to cool in the Southern regions, and many builders push to get as much as they can finished before the snow flies in the Northern regions.

Canadian lumber mills duty rates are set to increase in most cases in August which could create a stronger Canadian discount in pricing for the Canadian market.

FRAMING LUMBER

OSB

The OSB market is a curious one. It has now been 5 weeks since we have seen any price movement and yet there is very little product available on the cash market. Reports of mills in the West and South getting $10-$20 over posted numbers offset a week Eastern market.

PLYWOOD

Plywood also remained flat month over month as mills continue to be able to move production but are struggling to create much of an order file to allow them to push prices.

July 26, 2024 LUMBER MARKET REPORT HIGHLIGHTS:

• Framing lumber sales turned out stronger than recent showings, the average lumber price saw a small bump for the second week in a row.
• Western S-P-F prices increased with sporadic sales, and some mills reported best sales in weeks. Wildfire in Jasper caused severe damage and led to closure of a crucial CN rail line.
• Lumber futures showed a rocky start to the week for the July contract but picked up later in the week, surpassing last week’s settlements.
• Stud lumber did not see much gain, with prices fluctuating greatly among mills.

July 26, 2024 PANEL MARKET REPORT HIGHLIGHTS:

• OSB sales stayed modest with largely unchanged prices.
• Weaknesses in Eastern Canada and the availability of quick-shipping loads led some mills to provide discounts.
• Western plywood saw a sales boost for some mills this week, although many wholesalers experienced mostly steady overall activity
• Canadian plywood producers noticed increased inquiries from buyers aiming to fill slim inventories. Eastern buyers considered additional purchases due to wildfires disrupting rail transportation.

*All Pricing is in CAD