November Market Update: Needs-Only Buying Causes Lackluster Pace

The western plywood market continues to plod along into the holidays, with a lackluster trading pace persisting into Thanksgiving. Overall, prices are still grinding a bit lower, but with all mills trying to dig in as well.

Most commodity items are at or under water, cost-wise, on the western plywood production side. Steady buying in the southeast pine plywood region and an overall active and firm market in eastern Canada is encouraging, particularly for this time of year.  51929477069 70f1e42626 c

Customers are still keeping it tight on the buy side, with the needs-only buying strategy still in place. U.S. CCX sales to Canada over the past few weeks is noteworthy, as that demand certainly helps U.S producers. That play will persist as we move into December, as most British Columbia mill order files are into late December or beyond.

It appears oriented strand board (OSB) moved in volume in some parts of the country, given some steep discounting. Over the past two years, our commodity panel markets bottomed in December and moved substantially higher going into January. Of course, this is a different year, with far different circumstances and comparisons may not be valid, but still interesting to note. Stranger things have happened.

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Prices on commodity lumber and panels are likely in the lower 10 percent of their recent price ranges. Mills continue to articulate the pain of producing right now, with high fiber costs, ever increasing production costs, and unrelenting labor challenges. For traders, it continues to be a small ball strategy for now. However, we’re also likely to get overdone to the downside, pricewise.


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