Market Report: Plywood Market Rebound and Supply Tightening

Markets can certainly change faster than people anticipate! We have seen a significant reversal in the strength of the plywood market in the last two weeks. Reporting agencies are indicating a $15 per thousand improvement in pricing, but we are outpacing reported pricing by a considerable margin, and with volumes to back the increases.

To be honest, my prediction was that the plywood market was going to improve well before April. My general feeling was that there have been so many market disruptions, particularly for panels and veneer, that the market would be late to recognize the tightness in some product lines, and that there would be a stronger than anticipated surge in pricing. It could still be that some are late for the party. Unfortunately, I missed the prediction by a month or two. If it wasn’t for the war in Iran, I believe that wood products markets and the housing market would be going gang busters right now.

The domestic supply disruptions over the past month—including Roseburg’s reduction of plywood production, the shutdown of Roseburg’s Weed operations, SDS halting panel and veneer production, and more—already led to an unpredictable market. Take into account the broader impacts of trade policy and an obvious need to shorten our global supply chains, and things become even more unpredictable.

We are seeing a broad coalition of customers appearing who have been sourced by foreign wood but are now looking to shorten supply chains and avoid any potential tariff issues by sourcing wood products domestically. It is criminal that the US and the Pacific Northwest destroyed the wood products industry by crippling timber supply just to source from foreign producers.

The fact customers are returning to domestic sources is positive, but we should never have given up our markets in the first place. We grow more wood on an annual basis than we have ever consumed. We should make all of our wood products here at home to the benefit of American workers, with the stringent environmental standards afforded by US regulation.

A review of the USMCA is scheduled for the beginning of June. While most are predicting a very casual review of the trade agreement, I’m not so sure that is the case. Wood products have survived the Section 232 review which means that it isn’t subject to the recent Supreme Court rulings on the President’s application of tariffs. It appears that this administration is committed to tariffs and is going to use all available legal processes to make sure they are implemented as broadly as possible. There is a 50/50 chance that there will be a tariff on all Canadian wood products, solid sawn or laminated, after the USMCA review has been opened.

The Mass Timber market is also showing significant strength. We just returned from the International Mass Timber Conference which hosted more than 3,300 attendees this year. It was a busy show and we were, as has been the case the last few years, the central lounge exhibition and showpiece. For us, conversations focused on warehouses, data centers, and multi-story buildings utilizing point-supported slabs. These are all applications we are particularly suited for. We are currently booked above our current production capacity for the next few months, so looking to add hours at our MPP facility.

Green veneer sales have also been good. Our current green veneer inventory is tight and will likely get tighter over the next month. Dry veneer sales have been a touch sluggish, but we anticipate improvement as plywood margins improve. There isn’t much incentive to add hours until veneer pricing improves. There just isn’t any juice in the squeeze of log prices to veneer already, and log prices are increasing.

There are still those who think that wood products markets will continue to bounce around breakeven levels through 2026. Personally, I think that is defeatist and that we are actually getting ready for a wild 2026. After the suffering endured by the industry over the last couple of years, it is about time for a reversal.