The commodity plywood markets continue to remain steady. Sales are coming at a decent, if unspectacular, pace while buyers continue to buy close in and are keeping their purchases measured.
There appears to be a good balance between supply and demand in the plywood markets. Steady demand and lean inventories require that buyers come in regularly, which results in a sneaky, solid market.
One trader put it well: it’s a “small ball” trading environment right now. For most, that is a welcome thing. However, with any kind of fall uptick in demand this fall, prices could move higher.
No one wants to own wood right now, and most are sure that the markets can’t get away from them. That is mostly accurate, but thanks to super conservative buying strategies employed by most buyers, along with lean inventories and good demand in the field, one can envision a scenario where things could get livelier under the right circumstances.
Rail business into crossover markets (where fir and pine compete for the same business) in the east has been steady-to-good. I’d venture to say that the rail markets were even a bit firmer than the west coast truck markets at the time of this writing.
Pine plywood is trading steadily, as well, with 15/32 4 ply being the tightest item in the southeast – trading at $100/m, roughly, over its counterpart in western plywood. That bodes well for Western 15/32 CD 4 ply, as it currently trades at a discount to pine in all crossover markets.
Western 15/32 CD 4 ply is potentially the best value in the market. Canadian plywood mills have order files from three to four weeks out, and sales are steady and measured; with Canadian buyers exhibiting the same buying strategies as U.S. buyers.
Current buying sentiment in the dimension lumber markets seems lukewarm. Buyers are unafraid of markets getting away from them and lumber buying sentiment counts for a lot in the overall psychology of the marketplace. However, once again, everyone is standing on one side of the boat. Whenever that is the case, you have to watch out for sudden or subtle changes that can tip things over.
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