Freres Lumber October Market Update: End of Month Brings Strong Sales for Panel Markets

October 28, 2019

The end of October brought a welcome week of strong sales for panel markets. All commodity panel markets had some level of participation–OSB, SYP and Western Plywood. A few things likely came together in the past week–10 days to make this come about. It should not be surprising to see a nice fill in buy move last week. Factors contributing to strong sales for panel markets are low inventory levels on commodity panels and better than expected business in the field. Business and shipments look good for the next 30-60 days, with low prices expected.

OSB started this last buying movement about a week to 10 days ago. Again, a combination of low inventories in the field and some curtailment announcements got the ball rolling and the buying increased, along with prices. A strong rise of $50-75/m in some cases. Plywood, in both the south and the west, enjoyed better volumes of sales last week following OSB’s lead. Pricing in both sectors was very competitive and sharp pricing helped to move off surpluses in many areas. This resulted in slight firming of prices in both areas by the close of the week.

Customers report solid business prospects for the remainder of the year, as long as weather allows shipments to the field. There is some optimism that panel producers might be able to conclude the year on a better footing, pricewise. Veneer has been steady, for the most part. Dimension lumber markets are mostly on solid footing.

Plywood producers in the south and west could use more of what we’ve seen in the past week. Prices are still at levels that are at break-even levels or lower for many producers. While better volume is welcome, it is bittersweet, with the depressed pricing. Hopefully, prices get an end of year lift. It’s been an unusual market all year, so strange things can always happen—markets can change quickly, when we least expect it.

Bob Maeda, Plywood Sales Manager