APRIL 2024 BUILDING MATERIAL MARKET REFLECTION

Building Material Market Overview

Buyers stayed on the sideline and mills held on hoping for a spring buy with the market remaining flat for much of April. The mills blinked first, lowering prices to find a trading level to move off building inventories. Buyers responding replenishing their inventories at levels similar to the last significant buy in February.

New Residential Construction Press Release (census.gov)

Canada Housing Starts (tradingeconomics.com)

Lumber looks to have found a bit of a bottom as mills were able to move excess inventories that had accumulated.

OSB prices peaked and started to grind down in April. There continues to be significant downward pressure on pricing moving into May.

Plywood mirrored OSB, with a weak Eastern Market bringing downward pressure on pricing heading into May.

EWP orders remain strong heading into the spring / summer season. We could see some transportation issues looming into May if there is a CN / CPKC rails strike.

We continue to watch the developments in the Suez Canal and the Port of Baltimore. The added threat of a CN / CPKC strike could cause supply chain disruptions.

Looking Through the Crystal Ball

Lumber seems to have found a bottom and feels like pricing could be in a narrow trading range for the foreseeable future. At current levels we could expect to see further mill curtailments out of British Columbia mills and some of the SYP mills in the southern U.S. If that comes into play along with the potential for a heavy forest fire season, the supply – demand dynamic could change quickly. Expect OSB and plywood to continue to push downward as they search for a bottom. Transportation issues continue to be on the radar screen with the potential of a CN/CPKC rails strike looming along with continued disruptions in ocean freight due to situations in the Suez Canal, Port of Baltimore, and a Chilean port strike.

FRAMING LUMBER

Trading overall took a step back from previous weeks, as buyers digested recent purchases and evolving economic developments amid the virus pandemic. Prices of framing lumber were mixed, with recent increases in Canadian S-P-F moderating, Southern Pine prices gaining upward momentum, and many sellers of western species still looking for a bottom. Led by the surge in Southern Pine, the Random Lengths Framing Lumber Composite Price posted a $4 uptick, a second modest increase in as many weeks.

OSB

Structural panel sales and price trends were mixed. Sales of OSB were more active, and prices ranged from firming in the north to surging in the south. A surge in demand for Southern Pine plywood that peaked in late trading supported price gains in rated sheathing and led some mills to go off the market to evaluate capacity. Western Fir plywood producers continued to run mills at a reduced rate, yet sheathing prices remained weak. Modestly stronger sales provided some optimism in the Canadian plywood market, but prices lacked any lift.

PLYWOOD

Pricing continues to surge upward with mills extending order files into late March, early April, creating a solid plywood market heading into the spring.

MARCH 28, 2024 LUMBER MARKET REPORT HIGHLIGHTS:

• Framing lumber markets continued to sink lower and sales activity started to increase with buyers coming off
  standby.
• Western S-P-F was offered at discounted prices to move accumulated product.
• Lumber futures saw variations throughout the week, the board’s cash market premium bounced back.
• Stud lumber pricing dropped again. Sales activity was lackluster in most species, some producers were selling
  lower than published prices.

MARCH 28, 2024 PANEL MARKET REPORT HIGHLIGHTS:

• OSB experienced slow sales activity, some producers were open to sell at negotiated prices.
• Dealers and distributors were hesitant to purchase more inventory and shifted their attention to selling
  existing inventory.
• Western plywood had quite the sales volume but was sold at a discount.
• Canadian plywood dropped in pricing as buyers lacked interest in making purchases, with downside risk
  looming.

*All Pricing is in CAD