SEPTEMBER 2023 BUILDING MATERIAL MARKET REFLECTION

Following a round of buying in late August, the market in September faced downward pressure on most items. Mills sat back on order files and buyers played around the fringes picking off any good deals that presented themselves, covering any immediate needs through distribution. It feels like the market is poised for another round of buying as mills order files are drying up and business continues to be steady in many regions with builders trying to stay ahead of the upcoming winter weather. But expect buyers to continue purchasing as needed and not taking a long position on the market.

New Residential Construction Press Release (census.gov)

Monthly Housing Starts and Other Construction Data Tables | CMHC (cmhc-schl.gc.ca)

Worker shortage in Calgary construction industry threatens delays, price increases | CBC News

Lumber saw downward pressure all month with 2×4 holding its ground and 2×6, 2×8, 2×10 pricing getting hit harder.  2×4 (-5%) and 2×6 (-12%) and 2×8 (-11%) and 2×10 (-12%). Studs were slightly off on 8’ trims 2×4 (-5%) and 2×6 (-4%) and 9’ trims taking a bigger hit 2×4 (-13%), 2×6(-12%).  Mills continue to search for orders to replenish dwindling order files.

The downward correction continued with OSB (-22%), which is curious as mills are reporting order files into early / mid-November and product outside of monthly contracts continues to be difficult to find. It still feels that this correction has some more legs to it heading into October.

Plywood found its bottom and bounced up slightly (-2%), Mills seem to still have product to move but have dug their heels in on prices.

Truss orders continue to remain solid in our local market. The EWP extended lead times of 16 weeks seems to be limited to 1-2 manufacturers although we are seeing a week or so added to our lead times, this is something we are keeping a close eye on.

The supply chain in all other product lines continue run smoothly. The exterior drywall issues that plagued the market over the past year or so seem to have been corrected with any remaining allocations being lifted in the past few months.

Looking Through the Crystal Ball

As we officially enter fall, the past few months have shown some interesting trends. Economic uncertainty and high interest rates are influencing decision making.  With supply being stable buyers are focusing on keeping inventory levels lean, comfortable relying on distribution to fill any holes. Expect this pattern to continue unless supply becomes an issue or we hear some economic news that brings confidence to the consumer.

FRAMING LUMBER

We saw downward pressure on most lumber products. 2×4 is trying to hold its ground while 2×6 is feeling the softest.

OSB

Continues its downward correction. Expect this to continue into October as it doesn’t feel like it’s found its bottom quite yet.

PLYWOOD

Found its bottom and bounced up slightly. Mills continue to search for order files which could apply more downward pressure heading into October.

SEPTEMBER 29, 2023 LUMBER MARKET REPORT HIGHLIGHTS:

• The framing lumber market saw another week of mixed framing leaving prices flat.
• Western S-P-F mills and buyers had a hard time selling and negotiating pricing.
• The November futures contract increased through the week creating a small premium.
• Stud lumber kept up with the framing lumber trend with having a slow week.

SEPTEMBER 29, 2023 PANEL MARKET REPORT HIGHLIGHTS:

• In most markets, OSB prices continued to hold with some discounts in northern markets.
• Quick shipments were offered in select markets.
• Western plywood mills reported a generally quiet week.
• Canadian plywood traders report a standoff between mills and buyers as they try to secure lower pricing.

*All Pricing is in CAD