JUNE 2022 BUILDING MATERIAL MARKET REFLECTION
Building Material Market Overview
After six straight weeks of decline the lumber market finally found a trading level in mid-June. A combination of buyers being comfortable with current price levels and a need for inventory spurred a buy in. Most were cautious and covered immediate needs, not wanting to take positions out too far. US housing starts showed its first negative report in recent memory, along with continued news of inflation and rising interest rates, added to the cautious approach to the market.
Lumber Prices Near Lows As Housing Starts Fall, Mortgage Rates Jump (businessinsider.com)
Lumber finally found its bottom and buyers who were running very light inventories filled their needs. Mills are trying to push pricing levels up; it will be interesting to see if they have much success. It feels more and more like we are starting to establish a tighter trading range on lumber and the incredible volatility and price swings we have seen over the last two years may be “normalizing”. Keep an eye on summer shutdowns and rumored curtailments as it could create some pinch points in supply.
Even with a large Western mill down due to a fire OSB is still struggling to find its bottom, the feeling by the end of last week was it was close. Both U.S. and Canadian business picked up giving hope that a trading level was found.
The price correction we were expecting on plywood hit quickly as we saw secondaries looking for business at over -20% off contract prices. As the month comes to a close it looks like the Eastern market is coming back to the table and plywood prices may have also found a trading level.
Truss orders are a bit all over the map right now with some weeks sales outpacing production and other weeks leaving some available capacity.
There are some hopes on the EWP front. Although mills continue to enforce allocations, we are starting to see some extra product being offered out, as regions that are starting to slow down are not needing their full allocations.
Finishing products supply continues to improve with the only issue affecting deliver being the odd late shipment. We continue to see price increases coming as raw material and labour costs continue to rise.
Looking Through the Crystal Ball
The markets feel like they are coming into a bit of a balance on all three fronts, supply, pricing, and transportation. With the latest correction in the market keep an eye on possible mill curtailments over the summer, which could cause some supply pinches. With OSB the question is: what will the impact of the Tolko fire have on the market? So far it has been minimal.
FRAMING LUMBER
Month over month the lumber correction was quite substantial. It looks like we found a bottom for now and mills are trying to push prices up. Order files are currently sitting at mid July.
| R/L | JUNE 24, 2022 | MAY 26, 2022 | +/- |
|---|---|---|---|
| 2×4 | $779 | $961 | -182 |
| 2×6 | $577 | $794 | -217 |
| 2×8 | $766 | $954 | -188 |
| 2×10 | $876 | $1,076 | -200 |
| 2×12 | $1,122 | $1,526 | -255 |
| STUDS | JUNE 24, 2022 | MAY 26, 2022 | +/- |
|---|---|---|---|
| 2×4 – 92 5/8“ | $681 | $1,057 | -376 |
| 2×4 – 104 5/8“ | $722 | $1,025 | -253 |
| 2×6 – 92 5/8“ | $681 | $916 | -235 |
| 2×6 4/8“ | $889 | $1,261 | -372 |
OSB
Still trying to find its bottom producers feel that we are close as they have seen strong U.S. and Canadian takeaway the past week or so. The question seems to be what will the impact of the Tolko mill being down have on the market moving forward?
| OSB | JUNE 24, 2022 | MAY 26, 2022 | +/- |
|---|---|---|---|
| 3/8″ | $510 | $800 | -290 |
| 7/16″ | $510 | $800 | -290 |
| 15/32″ | $530 | $820 | -290 |
| 19/32″ | $715 | $1,065 | -350 |
| 23/32″ | $870 | $1,265 | -395 |
PLYWOOD
With increase activity in the Eastern Canadian market and U.S. market, plywood seems to have found its trading level. The price correction was hard and fast for the month of June. Order files are sitting at 2 weeks or sooner
| PLYWOOD (STD) | MAY 24, 2022 | MAY 26, 2022 | +/- |
|---|---|---|---|
| 9.5 (3/8) | $615 | $1,062 | -447 |
| 12.5 (1/2) | $820 | $1,416 | -596 |
| 15.5 (5/8) | $1025 | $1,770 | -745 |
| 18.5 (3/4) | $1230 | $2,124 | -894 |
| 25.5 | $1851 | $3,192 | -1341 |
Framing Lumber Composite Price
JUNE 24, 2022 LUMBER MARKET REPORT HIGHLIGHTS:
- The framing lumber market strengthened as that was an increased amount of sales.
- Western S-P-F traders reported a mixed tone for the week with sales slowing late week.
- Futures shows a small upward momentum early in the week.
- Stud lumber prices showed more stability than previous weeks.
| This Week | Last Week | Year Ago | |
|---|---|---|---|
| FRAMING LUMBER COMPOSITE PRICE | $762 | $747 | $1,145 |
| 2×4 #2&BTR KD Western S-P-F | $779 | $724 | $1,077 |
| 2×6 #2&BTR KD Western S-P-F | $577 | $549 | $1,077 |
| 2x4x9′ Studs | $791 | $749 | $1,200 |
| 2x6x9′ Studs | $921 | $905 | $1,385 |
| 2×10 #2&BTR KD Western S-P-F | $1,020 | $1,003 | $1,416 |
2020-2022 FRAMING LUMBER COMPOSITE PRICE
Structural Panel Composite Price
JUNE 24, 2022 PANEL MARKET REPORT HIGHLIGHTS:
- Traders are more willing to buy are prices close in on pre-pandemic levels.
- Specific sheathing fell in Western Canada to the lowest level since July 2020.
- Measured sales provided some optimism due to lumber prices continue to firm.
- Plywood buyers continue to remain cautious.
- Canadian sheathing prices continued to lower close to the cost of production.
| This Week | Last Week | Year Ago | |
|---|---|---|---|
| ORIENTED STRAND COMPOSITE | $544 | $637 | $1,867 |
| 3/8″ 4×8 OSB | $510 | $570 | $1,915 |
| 23/32″ 4×8 OSB T&G | $870 | $950 | $2,435 |
| 3/8″ 4×8 Spruce Plywood | $615 | $686 | $1,519 |
2020-2022 ORIENTED STRAND BOARD COMPOSITE PRICE
*All Pricing is in CAD