Freres Lumber September Market Report: Plywood Sales Finally See Gains

September 9, 2019

Plywood sales gainshave finally arrived. Over the last few weeks we have gradually increased sales volumes. Granted, volumes hit very low levels and it was hard to gain any traction. Whether Hurricane Dorian, lower interest rates, or the final gasp of the building season, sales volumes over the last couple of weeks have been the best we have seen in almost a year. To add a bit more optimism in the picture, we have also seen an almost 10% price gain this week. Upward price movement is welcome considering we have hit the lowest prices we have seen in years.

Veneer Sales Match Plywood’s Sales Gains

Veneer has improved alongside plywood sales. We are starting to sell more volume, even as we dig our heels in with pricing. LVL sales volumes are incrementally increasing, long-length veneer, and green veneer are starting to increase as customers have right-sized their inventory positions. Veneer market prices have bottomed, from our perspective, and should only move up from here. Random Lengths, the trade publication for our industry, has lost all semblance of reality and balance, continuing to publish cheap Canadian prices and desperate domestic producers without regard to the prices quality, established veneer producers have been able to garner for their products.

Domestic Wood Products Market Disrupted by South American Imports

We are starting to receive quotations forSouth American CDX panels in the NW. In the past, these products have been primarily limited to the gulf coast or to appearance grade material. The US has truly turned into the dumping ground for wood products from all over world. The real-world impact from these cheap, low quality, sub-standard panels can’t be ignored and amounts to the take-over of almost 25% of the domestic US market by inferior imports. Look for additional news regarding this issue soon.

Withstanding the Market Swings

We hope that the improvements in our markets are not a short-term aberration, that things will continue to improve through the fall and continue through the winter. Winter has traditionally been a difficult time for wood products as projects grind to a halt when poor weather sets in. We know, however, that affordable housing is not available across the US, that housing prices continue to increase, and available housing inventories are still at historic lows. There is potential for wood products markets to surprise to the upside this winter. Rest assured, we have been through 97 years of operations. We have seen the lowest markets and the highest markets. While there is a tendency to think that each time it is different, we have weathered the worst of them.