Freres Lumber May Market Update: Plywood Market’s Slow Start Persists

May 28, 2019

The plywood market’s slow start has continued into the building season. The past month has recorded flat pricing and day-to-day dickering on orders as the rule of the day. Some production is quietly being trimmed from several western plywood mills as traders at all levels muse about the summer prospects for the panel markets. It is abundantly clear that, for the moment, there is too much product available to customers in the U.S. The proliferation and abundance of imported sheathing and sanded material from South America, China, and Canada has diluted and depressed the domestic markets like never before.

Sluggish Buying Activity Due to Wet Weather Across the Nation

That said, it’s likely that we have still not seen full consumption come into play in the U.S. just yet. Lingering wet weather across the country in the past sixty days has also contributed to a stunting affect on the markets. How much? We’ll soon see. Much of the country is starting to finally see real late spring and early summer temperatures, although wet and stormy weather continues to persist in many areas. All panel sectors have been mired in this malaise all spring, including Canadian plywood, Southern Yellow Pine plywood, Western Plywood, and OSB. To repeat what we’ve said for a long time; prices are cheap across the board. Mills are grinding away and fighting to keep their heads above water. Customers still have no fear of anything getting away from them, so they continue to buy for their needs only in almost all areas. And it’s hard to blame them for that behavior. The dimension lumber markets continue to struggle in many of the same ways that panels are struggling.

Staying Positive as the Months Grow Warmer

It’s likely too early to make drastic summer and fall predictions for the markets. We all know it is mostly when markets have been in prolonged down periods and EVERYONE knows they can go nowhere, that they are the most dangerous. While it appears likely that the markets will not reach the highs of last year, it is also as likely to expect that some seasonal lift to the commodity markets should not be surprising. Low inventories. Lumber and panel curtailments. Improving summer business ahead.We all hope these things can give the industry a lift in the near future.