Market Update: Commodity Plywood Market Steadies Amid Weak Demand

After a couple weeks of above-average sales earlier this summer, the commodity plywood market has once again slowed back to a more pedestrian pace.

Current Market Conditions

There are signs of slightly better demand in certain areas. Combined with some curtailments and downtime at several western plywood plants over the past month, this has helped steady pricing somewhat—though it remains unspectacular overall. Prices are up $10–20/m from the lows seen four to five weeks ago.

Inventories remain light across much of the country. As a result, weekly “fill-in” buying continues as normal and necessary, but it has not been strong enough to drive major shifts in the market.

Tariffs and Imports

Talk continues around the effects of Brazilian tariffs on the domestic commodity plywood marketplace. So far, the impact has been muted. Existing import inventories appear adequate to meet current buyer needs, and by some reports, prices for wood sitting at ports are only about $20/m higher.

The real test will come later in the year. If the tariffs on Brazilian wood remain in place into the October/November period, we could begin to see more movement in the marketplace. It’s difficult to imagine that there will be no effect on pricing over time, but before that happens, excess import inventory on the ground will need to be worked through.

Looking Ahead: Interest Rates and Housing

All eyes are now on the next Federal Open Market Committee (FOMC) meeting in September. Many in the industry are expecting the Fed to start dropping rates at that time. If that happens, it could provide much-needed optimism for the building sector.

Lower rates would not only improve builder confidence but could also spur activity across the broader economy. For now, however, all commodity lumber and panel markets remain in a bit of malaise, with mediocre demand continuing to set the tone. Mills are grinding away week after week, taking the best of the worst to keep production moving.

Final Thoughts

First things first: we need to see rates head lower in order to build positivity in the building sector. If rate cuts trigger a string of positive outcomes for the economy, that momentum could help turn things around.

It is, without question, a complicated moment for the wood products industry. A whole lot of balls are in the air right now—tariffs, interest rates, and inventories, all working together to shape the months ahead. Our message is simple: keep your head, pay attention, and keep moving forward.