Western Plywood markets have shown some life this past week, resulting in the best weekly sales volume we’ve seen in quite a while.
It shouldn’t be surprising that we are having a bit of an underbought rally. Inventories have been lean for a long time. Since the first of the year, there have been numerous announcements in the commodity lumber side for either extensions of current production curtailments or new curtailment announcements.
This has spurred closer attention by buyers recently, and resulted in lumber prices rising steadily across the board. And prices are still cheap. Many speculate that there will be more lumber curtailment announcements ahead.
On the panel side, SYP plywood had a good sales week last week and has built on modest order files and firmer prices. Likewise, in most regions, OSB has enjoyed improved sales and prices that have come up off the bottom.
Western plywood mills started to see better activity last week, as well, and there has been solid carryover into this week. Commodity sheathing prices have firmed up and bumped up from their lows. This is the first time that has happened in months, giving mills a bit of breathing room.
We’re only halfway through winter, with another six weeks to navigate until the weather starts to moderate. Nonetheless, this latest market move, though modest so far, has been purely on demand; coming from an underbought field. From where we sit, most customers continue to keep their buying close in and tight, and we have seen no speculative buying at any level.
Unsurprisingly, reports show that large national builders have long ago pulled in their horns, while smaller builders across the spectrum seem to be faring better. These smaller builders continue to maintain a respectable pace of business, in spite of daunting economic news. Multi-family building seems to be a mixed bag, depending mostly on availability of financing for projects with extended development time frames.
We hope that a still, underbought field will continue to prove an adequate level of business to, at a minimum, buy regularly and moderately.
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