MARCH 2022 BUILDING MATERIAL MARKET REFLECTION
March was a month that saw many factors impact market direction in both positive and negative ways. Logistics continued to be the focus point with everyone holding their breath on a potential CP Rail strike. Fortunately, this only lasted a day and a half before both sides agreed to binding arbitration so there would be no disruption. https://www.cbc.ca/news/canada/calgary/cp-rail-teamsters-canada-strike-1.6387936
The main factors that have been impacting the market eased as the month progressed
- Transportation, especially rail saw marked improvement.
- Labour, more specifically labour issues due to COVID
The easing on transportation very quickly brought available product to the market causing buyers to pause and take a wait and see approach, and cracks started form. As the month came to a close those cracks had widened considerably as both mills and secondaries searched for a trading level, further pushing buyers to the sidelines.
New home sales and starts continue to be very strong but it is being offset by lower than anticipated retail and DIY numbers. Are we starting to see the impact of record inflation levels in North America? That along with the impact of projected interest rate hikes are something to keep an eye one going forward.
OSB started to show some cracks in pricing for the first time in months. Mosty caused by transportation issues, secondaries searched to keep product moving in Canada because shipping to the U.S. had become very difficult. This brought product to the market at aggressive numbers well under contract pricing.
Plywood improved as most late shipments finally arrived. This stabilized pricing bringing everything back in line. Availably going forward is still relatively tight as mills are quoting May / June delivery on most new orders.
Truss orders were strong again for the month pushing lead times out for many producers. The impact of the EWP supply issues and allocations are being felt in full force. Some allocation levels were even lowered by some manufacturers. To say the next 2 months will be very challenging with EWP is an understatement.
Finishing products are seeing some relief as raw materials and products continue to get better with regards to offshore deliveries. This can be hit and miss at times, but the majority of manufacturers feel that they are through the worst of the supply issues.
Looking forward. With demand still strong in both Canada and the U.S. and many underbought heading into peak season there could be a very quick snap back once the buying starts. As one buyer put it, “everyone will try to squeeze through the same door at the same time”.
FRAMING LUMBER
Strong downward pressure and dwindling order files at the mill combined with transportation issues into the U.S. have mills looking at steep discounts to move product into the Canadian market. Keep an eye on this because this situation could turn quickly as transportation to the U.S. Continues to improve. Business is strong and many suppliers are underbought, meaning they will need to buy sooner than later.
| R/L | APR 7, 2022 | FEB 28, 2022 | +/- |
|---|---|---|---|
| 2×4 | $1,350 | $1,748 | -378 |
| 2×6 | $1,257 | $1,556 | -299 |
| 2×8 | $1,257 | $1,505 | -248 |
| 2×10 | $1,270 | $1,575 | -305 |
| 2×12 | $1,572 | $1,652 | -80 |
| STUDS | APR 7, 2022 | FEB 28, 2022 | +/- |
|---|---|---|---|
| 2×4 – 92 5/8“ | $1,257 | $1,543 | -286 |
| 2×4 – 104 5/8“ | $1,194 | $1,614 | -420 |
| 2×6 – 92 5/8“ | $1,100 | $1,153 | -53 |
| 2×6 4/8“ | $1,427 | $1,748 | -321 |
OSB
Cracks are showing in OSB for similar reasons to lumber. Lack of liquidity into the U.S. market due to transportation. Rumors are out there that a couple of big blocks were sold into the U.S. in the 300 Carload range. This could give mills an opportunity to firm up prices.
| OSB | APR 7, 2022 | FEB 28, 2022 | +/- |
|---|---|---|---|
| 3/8″ | $1,330 | $1,645 | -315 |
| 7/16″ | $1,330 | $1,645 | -315 |
| 15/32″ | $1,330 | $1,665 | -315 |
| 19/32″ | $1,675 | $1,990 | -315 |
| 23/32″ | $1,905 | $2,220 | -315 |
PLYWOOD
Plywood remains relatively flat for the Month. With order files out to May we should expect this to continue.
| PLYWOOD (STD) | FEB 28, 2022 | FEB 28, 2022 | +/- |
|---|---|---|---|
| 9.5 (3/8) | $1,179 | $1,155 | 24 |
| 12.5 (1/2) | $1,572 | $1,540 | 32 |
| 15.5 (5/8) | $1,965 | $1,925 | 40 |
| 18.5 (3/4) | $2,350 | $2,310 | 40 |
| 25.5 | $3,543 | $3,471 | 72 |
Framing Lumber Composite Price
APRIL 1, 2022 LUMBER MARKET REPORT HIGHLIGHTS:
- Framing lumber weaknesses continued to broaden across species with key prices posted with triple-digit decreases.
- The Random Lengths Framing Lumber Composite Price decreased which matched the increase back in mid-December.
- Buyers continue to use caution with historically high prices, increasing mortgage interest rates, and rising concern about the inflation in the economy.
| This Week | Last Week | Year Ago | |
|---|---|---|---|
| FRAMING LUMBER COMPOSITE PRICE | $1,418 | $1,582 | $1,292 |
| 2×4 #2&BTR KD Western S-P-F | $1,501 | $1,695 | $1,316 |
| 2×6 #2&BTR KD Western S-P-F | $1,388 | $1,519 | $1,341 |
| 2x4x9′ Studs | $1,376 | $1,588 | $1,559 |
| 2x6x9′ Studs | $1,626 | $1,808 | $1,599 |
| 2×10 #2&BTR KD Western S-P-F | $1,526 | $1,651 | $1,438 |
2020-2022 FRAMING LUMBER COMPOSITE PRICE
Structural Panel Composite Price
APRIL 1, 2022 PANEL MARKET REPORT HIGHLIGHTS:
- Structural panel prices decreased as producers struggled to completed orders.
- As order files continue to decrease, OSB mills open to counters, but found minimal buyers wanting to make a firm offer.
- Southern Pine plywood sales were mostly seen to be fill-in purchases, although some mills extended order files and generated some momentum.
- Sheathing prices continues to be low in Western Fir plywood, as most buyer strayed to the sidelines.
- Eastern Canada plywood distributors reported slow sale while continue to wait for late deliveries.
| This Week | Last Week | Year Ago | |
|---|---|---|---|
| ORIENTED STRAND COMPOSITE | $1,716 | $1,791 | $1,387 |
| 3/8″ 4×8 OSB | $1,600 | $1,675 | $1,415 |
| 23/32″ 4×8 OSB T&G | $2,175 | $2,250 | $1,765 |
| 3/8″ 4×8 Spruce Plywood | $1,179 | $1,179 | $1,233 |
2020-2022 ORIENTED STRAND BOARD COMPOSITE PRICE
*All Pricing is in CAD