SEPTEMBER 2022 BUILDING MATERIAL MARKET REFLECTION
As September comes to a close, we find ourselves in a market cycle very similar to last month. Buyers fighting uncertainty in the market due to inflation and rising interest rates, continue to step in when they need to and then retreat to the sidelines. Reluctant to take any significant positions heading into the winter months. Even further mill curtailment announcements or a potential rail strike did little to push buyers off the fence with any significance.
Microsoft Word – newresconst_auto_text.docx (census.gov)
U.S. and Canadian Housing Starts Not Yet Humbled by Higher Interest Rates – constructconnect.com
Lumber was lackluster at best dropping about 5% for the month across all widths. Some products could be found at significant discounts while mills held firm on their pricing on some of the more sought-after items. Some mills were stating order files into mid-October yet there were reports of many PO’s arriving as early as the following week.
OSB continued the price correction that started at the end of last month. Finally finding a bottom around mid-month. Supply remains tight as the two western producers have scheduled maintenance downtime going into October.
Plywood pricing also had significant corrections in September. With many feeling mills are hitting break-even costs at current price levels are we close to a bottom?
Truss order files remain strong as producers continue to work through the backlog of orders accumulated in 2022. This should carry many into the new year. Joist product is starting to open up with producers talking about lifting allocations over the upcoming weeks. LVL supply is still a major issue for most as allocations continue.
Building materials are continuing to show some supply issues with LP Smart Panel and trim, exterior drywall, and Tyvek house wrap, currently the three biggest challenges. Some due to allocations and some due to extended lead times
Finishing products remain in good shape, as producers report that raw material supply continues to be good allowing them to stay caught up with orders.
Looking Through the Crystal Ball
Expect the current trading cycle we’re in to continue throughout the rest of this year. Keeping prices in a fairly narrow trading range on most products. At these price levels, watch for more curtailments as mills try to get supply and demand back in line.