Market Update: Weather and the Plywood Market

The Western plywood commodity market bottomed out a couple of weeks ago, and has since regained some lost ground on prices. This past week of steady sales follows our best sales week of the year. A combination of factors likely brought the turnaround, namely low prices, low inventories and improving weather across the country.

The bellwether 15/32 CD 4 ply market has gained close to 10% of value from its market lows a few weeks ago, but is far from expensive. While the commodity lumber and panel markets have been a mixed bag for the past 30 to 45 days, the warmer, drier weather across much of the country has spurred shipping and in turn, increased fill-in buying.

Most commodity sectors seem to be showing gradual improvement, some more than others. On the panel side, OSB appears to be largely solid across the various producing regions, with reported order files deep into May.

Likewise, pine plywood mills appear to be selling steadily, while unspectacular, and have two to three-week order files. It doesn’t appear that customers are going to change their buying behavior any time soon. I don’t expect to see buyers chase the market; they will continue to buy for only their near-term needs.

I believe it’s still a prove-it-to-me market, but at this stage of the game that is not a bad thing. With caution as an overriding theme in the industry, there will likely be wood that needs to be purchased every week. This means sellers at all levels will have the opportunity to vie for these orders. We haven’t yet seen the full force of the building season at work, but the next 30 to 60 days will likely tell us more. Bring on some sunshine to the northwest!

In company news, our plywood plant in Mill City, Oregon, will undergo some scheduled production downtime in order to install new equipment and renovations to our production line. The layup line will be down on Friday, May 5. We plan to resume layup line production on Monday, May 22.