Commodity plywood market conditions in January have been steady, though unspectacular. Since the start of the new year, we have been able to sell at slightly improved numbers across the board, generally in the range of $5 to $10 per thousand above printed pricing. While that level of improvement isn’t enough to move the needle significantly, it is encouraging compared to where we ended the year.
We remain firmly in winter trading mode, which is likely to persist for another 30 to 45 days. As is always the case in commodity plywood markets, weather can trump nearly every other factor during this time of year. Still, there is a sense of guarded optimism that market conditions and pricing could improve as we move further into the year.
Elsewhere in the panel markets, Southern Pine plywood appears to be holding its ground, with prices firming modestly from pre-holiday levels. OSB markets are also on better footing. Curtailments and a lack of inventory in the field have helped push prices higher, with gains of approximately $25 to $35 per thousand in recent weeks, depending on the region. Some OSB mills are now quoting shipments for late February and early March, a notable shift from the slower pace seen late last year.
As we’ve mentioned previously, it still feels like both our markets and the broader economy are underperforming relative to otherwise favorable economic signals; whether those are current conditions or developments that are widely anticipated. There are, of course, many variables in play that influence outcomes, including interest rates, politics, geopolitical factors, and perhaps most importantly, overall public sentiment. It’s a lot to track on a daily basis.
Buyers across the board continue to operate in a just-in-time purchasing mode, keeping inventories lean. At the same time, they are clearly aware of subtle shifts in commodity lumber and panel markets, with many prices now higher than they were just a month ago. In response, mills are beginning to hold firmer on pricing in more situations.
Looking ahead, price volatility still feels likely. What the industry needs most this year are stronger markets and improved pricing, and ultimately, a meaningful pickup in the residential construction sector. As always, the direction will become clearer with time.
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