NOVEMBER 2021 BUILDING MATERIAL MARKET REFLECTION

November proved to be a volatile month in the lumber market. The first two weeks of the month saw the market on a steady decline, but the last two weeks saw the market make a 180-degree turn, quickly erasing any losses and finishing up as November comes to a close. Many attribute a strong U.S. housing report, and a potential supply chain disruption due to heavy rain in British Columbia, combined those with incoming duties of up to 20% on Canadian lumber products shipping to the U.S.,

The OSB Market was perplexing for buyers. R/L Print reported prices declining but product was difficult to source. Sales reports out of distribution was at a $100-$150/M premium to R/L Print. As the month closes there is a sense that OSB could be positioned for a bit of a run.

Plywood finally found its footing after over 2 months of no movement. Lead by strong activity in Eastern Canada, mills were able push prices upward and solidify order files in many cases into the New Year.

Truss production looks to remain strong to finish out 2021. Builders are pushing to get as much product to sites as quickly as possible, as they try to keep pace with strong demand. This, combined with continued supply chain issues and allocations, is creating challenges for producers.

In building materials and finishing, a few products continue to be an issue as we head into December. As reported MDF suppliers are cautiously optimistic; raw material supply is getting better. Exterior drywall will continue to be an issue as we head into 2022, as will LP Smart Panel/Trim. Distributors are on allocation with any new orders not arriving until sometime in the new year. The past two weeks or so has seen adhesives becoming a supply issue as well. Expect price increases to continue as raw material and transportation costs continue to rise.

FRAMING LUMBER

Lumber finished a very volatile month on a positive note. Supply chain issues due to heavy rain in British Columbia, combined with a strong U.S. Housing report and new duties imposed on Canadian lumber products to the U.S., pushed the panic button on both U.S. and Canadian buyers. The question now is, “Will this market have any momentum going into December and the New Year? Or have buyers filled their needs going into 2022 and moved to the sidelines?”

OSB

As mentioned, the OSB market is a bit perplexing. Prices retreated in November, but supply remains tight as many producers are now quoting product into the New year. With plywood starting to gain traction, don’t be surprised if OSB soon follows.

PLYWOOD

After 10 weeks of no movement whatsoever plywood finally found some footing as the Eastern markets woke leading the charge. Mill order files are now into early 2022 so there is little downside risk on plywood at the moment.

ENGINEERED WOOD PRODUCTS

Pressure on truss production continues as builders look to keep pace with strong demand. Allocations on EWP particularly LVL beams will continue as we close out 2021, putting strong pressure on truss manufacturers.

FINISHING PRODUCTS

Exterior drywall and LP Smart Trim and Panel will be a struggle going into 2022, with extended lead times and tight supply. MDF suppliers are cautiously optimistic as the raw material supply they have been waiting on is starting to arrive. Keep an eye on adhesives as we are starting to see supply issues on many adhesive products. Expect price increases to continue as raw material and transportation costs continue to rise.

NOVEMBER 26, 2021 LUMBER MARKET REPORT HIGHLIGHTS:

• Framing lumber markets continued its gradual climb heading into the US Thanksgiving holiday.
• Some buyers were content to digest recent purchases as many traders vacated early for the holiday.
• Logistical uncertainties in British Columbia fueled supply concerns, which kept other traders active.
• The province of BC had more heavy rain forecast this week and into the weekend.
• Other traders turned their attention to the first quarter.

NOVEMBER 26, 2021 PANEL MARKET REPORT HIGHLIGHTS:

• Strength in structural panel pricing was weighted heavily toward plywood.
• OSB prices remained firm but flat going into the U.S. Thanksgiving holiday.
• Steady price gains in Southern Pine plywood were due to tightened open-market supplies.
• Producers raised prices more aggressively and spent time off the market; western Fir plywood order files were extended, some into early January, with strong sales.
• Mills limited offers and went off the market as a result of Canadian plywood order files being pushed out into the latter half of January.

*All Pricing is in CAD