The level of the overall lumber and panel market seems to have found a bit of a resting level for the time being. Beginning in the middle of March there was a sizeable correction for most wood related products including OSB. As buyers felt more comfortable with the lower prices, they stepped in to fill holes and shore up their inventory levels. This caused many order files at the mills to extend out into June and allowed them to stop entertaining counters and push prices up a bit. The determining question is whether there is any strength or momentum behind this latest round of buying to keep current levels where they are. Given the pace of interest rate hikes along with overall inflation in products outside of our industry, there is some uncertainty as to what is going to happen on the demand side, especially as we get into the third quarter. Rail car shortages and ongoing challenges with trucking have limited the amount of supply coming out of the mills but even with these constraints, the supply/demand balance is going to be very unpredictable. Huge swings in the market have become a very challenging reality to deal with and it should surprise no one that we probably haven’t seen the last of them, in either direction.
The level to which many building materials have reached is either closing in on or passed the unbelievable mark. Paying over $20 for a sheet of drywall or $100 for a square of roofing remains unfathomable. Unfortunately, there seems to be little relief in sight for most of these products as price continues to take a back seat to supply. Whether the imbalance is as real as they say is unknown, but the manufacturers have stuck to that theme for over a year now. What’s evident is that it is trending in the opposite direction. The flow of some items is improving, but that can’t be said for everything. Aluminum products and adhesives are on the top of the list of products in short supply. Lead times are still much farther out than we’d like but we see improvements here and there. It could be that we’re close to the apex of pricing for much of what goes into a home outside of lumber.