The severe imbalance in the supply and demand conditions that began with COVID may very well be coming to their end. The price corrections in lumber and plywood which began last March have certainly reached levels we had all previously been accustomed to. The very bottom of pricing may be a bit higher than historical lows but not by much, and we don’t know what the future holds. Mills limiting production has not been enough to counter the decrease in demand to the point that they could control trading levels. And that’s not to say demand has fallen all that much. It could be that the levels of inventory tucked away in all the reloads and distributors along with the product still being produced can no longer be ignored. It’s no secret that mills and manufacturers do a dance to keep prices as high as they can for as long as they can. But there are times when the abundance of supply can no longer be denied, and the cartel falls apart. This has already happened in lumber/plywood and we’ve also seen it in engineered wood products. There are signs that the same is going to happen with lots of other building
materials as well, although the process for this takes some time. But when that snowball gets going, many times it’s fast and furious.