Market Update – June 7, 2021

It is with guarded optimism we can finally report there has been some downward movement in the numbers Random Lengths put out in the past 10 days for most dimensional lumber items. The cash market hasn’t reflected the full amounts of these decreases as both sellers and buyers are trying to figure out where the market is at and where it’s going. Lumber futures have been on a roller coaster over the past few weeks with most of the movement downward and this has put some pressure on the cash market. But most mills claim their order files extend out to late June/early July so there isn’t any immediate pressure for them to lower pricing. Overall strong demand, skinny inventory levels and the perception that many players are under bought and need to step in have most traders doubting that this will be a considerable correction.

Memorial Day sales at the boxes were widely reported as very disappointing due to weather and the notion that sticker shock is finally forcing wallets back into consumers’ pockets. Many of the harder to find items have recently begun to show back up for purchase as most buyers have restricted their purchases to strictly cover immediate needs and putting off as much buying as they can which has pushed down the level of demand. The U.S. chose to double the current tariff on wood coming in from Canada from 9% to 18% but this shouldn’t have much short term effect on prices. Rail cars have become a bit more available but trucking is still a huge issue. An Elkhart based trucking company is offering a $10,000 signing bonus and guaranteeing first year wages of at least $75,000 in an attempt to get drivers. One of our nail suppliers told us that the transportation company holding their container that finally got into port was demanding an additional $15,000 to expedite the delivery. Trucking woes will be with us for some time.  While we’d like to think this is the beginning of a major correction in price we are still in a wait and see position.

Plywood and especially OSB continue to be very scarce with many mills claiming they will not have any open market wood for the remainder of the year. LP has completely stopped making their commodity ¾” underlayment and Huber is limiting their output of Advantech. Alternative products for wall sheathing have been a major disappointment as shipments are not showing up as promised and the product reps who touted them have gone into hiding. OSB print has slowed down a bit but is still moving up. Price remains a secondary concern behind supply.

All other building materials continue to have very long lead times and product restrictions. Price increase announcements continue to roll in as there is nothing to impede manufacturers’ lust for additional profits. The supply and demand imbalance has them clearly in the driver’s seat. Some lines that are especially challenging are kitchen cabinets, interior and exterior doors/components, windows, insulation, sidings, and gypsum. Continue to plan out as far as possible.