Most lumber products continue to exhibit price stability as demand is not keeping up with the amount of available wood. In spite of mill shutdowns and production curtailments, there is plenty of lumber available to buyers. Inventory levels are skinny throughout the supply chain but there is little urgency to build stock as demand remains subdued. Southern yellow pine is the only species bucking this trend, showing strength as wet weather in the south is limiting the harvesting of logs. The OSB manufacturers have been able to prevent price erosion by limiting production to only cover contracted wood, leaving little for the cash market. Some blocks have been offered out
but few buyers have been motivated to take any big swings at any considerable volume. Even though downside risk is generally viewed as minimal for OSB, there just hasn’t been much activity in the past month. The overall price stability is a welcome thing given the volatility the industry has experienced over the past two years. Lead times for most building materials continue to improve. The labor challenges all manufacturers faced during the pandemic have mitigated to a large degree. One aspect that many manufacturers, and likely most of us, are still grappling with is the quality of the employees willing come back to work. This continues to improve but struggles with quality control and overall care in the making and packaging of many products are still a cause for frustration. Price deflation is slow coming but pressure continues to mount as competition for market share is growing in some product categories. The roofing manufacturers have all just announced a 3-5% price increase for midMay. We’ve been told that this is in response to recent storm activity resulting in an increase in demand. It’s actually a practice that’s become popular in recent years to announce an increase when being faced with possible price deflation. Time will tell.