Plywood prices began improving early in September and have grown continuously upward since then. It was a grind because price increases were hard fought and very gradual over the month. The result, however, was a 12 percent increase in prices to a published mid-week price of $515 for ½” 4-ply, our benchmark product, from a previous low of $455.
From a producer’s standpoint, the optimistic analysis of plywood pricing is that the market has recognized that we are subject to inflationary pressures as well, and the previous plywood lows cannot be sustained as future lows. The other interesting item of note is that Southern Yellow Pine (SYP) panel prices remain significantly elevated as compared to Western Fir (WF) prices. This is especially true of thicker panels.
Random Lengths has continued to reference reduced levels of South American imports over the last month. This is interesting because the latest import data shows that Brazilian plywood imports hit a multi-year high in July at 165.7 mmsf, 3/8” basis, an 84 percent increase year over year. Reports from the field confirming reduced imports are a likely reason for the disparity between WF and SYP panels considering the South is one of the first destinations for South American products.
Veneer continues to be a bifurcated market, with strong and consistent demand from LVL manufacturers and weaker demand from plywood producers. Considering that the majority of CD 54s are consumed by LVL producers, not plywood, Random Length’s continued reduction of CD 54s only reflects how out-of-touch the trade publication is with the actual market.
We should recognize that all was not well in plywood manufacturing in September as many mills continued to be impacted by escalating COVID cases and the associated reduction in production. LVL plants typically require far fewer people per volume than plywood, so the disparate impact is understandable.
Our production schedules continue to be impacted by labor difficulties and unanticipated absences. Every division of the company has felt the pain. We are also feeling the impact from contracted transportation with freight rates rising considerably over the last couple of weeks. It is a great time to apply if you’ve ever dreamed of being a truck driver!
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