Market Update: Buying Behavior in the Plywood Commodity Market

Over the past few weeks, there has been a notable softening in the commodity plywood market. While the beginning of last week saw market direction in disarray and prices on a downward trajectory, a shift occurred by midweek with prices showing signs of recovery.

Early on, certain mills were open to offering substantial discounts, and buyers responded by engaging in business within the lower end of the current price range. This trend continued as more buyers sought valuable opportunities. Surprising volumes were purchased, which led to the establishment of moderate to substantial order files for most mills.

How did this happen? A few factors contributed to this shift, including lean inventories, attractive pricing, a consistent and anticipated demand for September, and the willingness of mills to secure volume.

Another factor in play was the Western 15/32 CD 4 ply, which dipped below the price of its Pine Plywood counterpart. This shift prompted many buyers to view Western 15/32 CD 4 ply as a value-driven option. However, other sectors within the commodity plywood market, such as Pine Plywood and Canadian Plywood, appeared to be relatively less active compared to the activity observed in Western Plywood throughout the week.

As Western commodity plywood finds its footing and stabilizes this week, there is curiosity about whether this surge in activity will stimulate buying behavior in other plywood sectors. It’s heartening to witness renewed purchasing activity at the onset of the fall building season, which serves as a positive indicator of steady and decent demand within the field.

While buyers at smaller and medium-sized yards were not as active in this recent market activity, instead adhering to just-in-time purchasing, this behavior is likely to energize the market’s momentum moving forward. This is particularly significant as mills have shown some backbone through their latest market shifts.