Market Update: Plywood Market Recovery Signals Emerging

The last few weeks have been a choppy ride in commodity plywood. Prices have slowly edged higher out west, but weekly sales volumes remain uneven. One week feels solid, the next softer. That inconsistency has defined the winter market so far.

Winter weather across much of the eastern half of the country has certainly contributed. Ongoing storms in the Northeast continue to disrupt construction activity. For western plywood producers, that doesn’t help demand, but it’s also not unusual for this time of year. Winter trading patterns tend to be cautious. Most of us are watching for the seasonal lift that typically comes as weather improves. Hopefully that materializes in the weeks ahead.

For now, the winter market appears to be more supply-driven than demand-driven. Demand is steady, but unspectacular. At the same time, tightening supply — particularly in the East — has allowed Southern Yellow Pine (SYP) plywood producers to raise prices and extend order files well into March. That’s a meaningful shift compared to last fall.

Another notable change from last year is reduced commodity imports from Brazil due to tariffs. Those reductions appear to be having their intended effect, easing some competitive pressure on domestic producers.

That said, uncertainty about the broader U.S. economy remains on many minds. Several economic metrics are favorable or trending in the right direction, yet housing activity continues to feel stuck. Even with interest rates at 6 percent or below, residential construction has not accelerated the way many expected. It’s perplexing. While some are predicting a steadily improving economy this year, buyers in the commodity space are still proceeding carefully.

Commodity buyers continue to operate in a just-in-time mode, keeping inventories light. That approach limits near-term purchasing momentum. However, it may also introduce volatility later. When inventories are thin and buying is reactive, markets can shift quickly if demand strengthens or supply tightens further.

Even in this winter pattern, prices have moved. Since the first of the year, Western plywood prices are up approximately 2 to 4 percent. SYP plywood has increased more significantly, roughly 8 to 10 percent. These are not dramatic gains, but they are meaningful considering the pressure the industry has been under.

The hope now is to hold those gains — and build on them — as we move into spring. Prices are better, but still far from strong. Western producers, in particular, remain in need of healthier markets and sustained improvement.

There are early signs of tightening supply and modest pricing strength. There are also ongoing questions around housing and broader economic confidence. As we look ahead, the industry remains cautiously watchful.

We’re looking for improvement. Time will tell.