Market Update: Western Plywood Market Stabilizes After Choppy Sales

Western plywood sales have been choppy and uneven over the past three to four weeks, but not dead. The last two weeks of May and the first week of June were slower on the sales end, for the first time in a couple of months, as traders evened up their speculative inventory positions and customers took a breather on the buy side.

Prices gave up some ground during this time, but not substantially so, as buyers soon had to re-enter the marketplace in the past two weeks. Most of the buying has been measured, and in the just-in-time mode. Many buyers frequently chase their trucks into their yards, meaning they were low or empty of inventory. So, once again, it appears that the pipeline is bare, but customers are going to be content to operate with lean inventories.

Overall, the supply/demand balance seems to be ok, for now, which has brought some stability to prices. The net effect is that customers cannot stay out of the marketplace for very long, and frequent fill-in buying is essential for most people.

In other commodity markets of dimension lumber and Southern Yellow Pine (SYP) plywood, we see much the same pattern as western plywood—a decent balance in supply and demand. Most buyers appear to be content keeping light inventories and buying their needs only. Canadian plywood has been lackluster and discounted for a long time, but in the past couple of weeks the commodity plywood markets in Canada have firmed up considerably. It is still a discount to Western Plywood, but not nearly the spread as a month ago.

OSB continues to be the weakest link in our commodity group overall. It is still trading at big discounts to plywood, and seemingly unable to get out of its own way most of the time. It’s obvious that supply is much greater than demand. I’m surprised that major OSB suppliers have not dialed back production. It’s too cheap right now. 

So, the uncertainty in our markets continues, both short term and long term. As I mentioned, the supply/demand balance appears to be decent for most commodity groups, meaning a measure of stability in the pricing of our commodity markets.

Of course, the uncertainty in our markets, and the economy at large, stem mostly from the Iran War’s effect on almost everything in our economy and politics—fuel prices, inflation, interest rates, midterm election outcomes and effects. Lots of things to be considered in the weeks and months ahead as some semblance of a peace agreement is perhaps in the making.

On the other hand, AI development, of course, dominates our thinking as a huge driving force in our economy. It is and will continue to transform our lives, our businesses, and our economy.  No going back now.

We are celebrating the 250th Birthday of our great country in less than two weeks. Our country has been through a lot in its relatively short history, but we remain a beacon of freedom and liberty in the world. There is so much to be thankful for living in this great country, and we should all be proud of all that makes us Americans.

Nowhere else in the world is there a place like the U.S.A.—the greatest country in the world. Look no further than all tens of thousands of foreign fans here to see the World Cup games with fresh eyes, as they are absolutely delighted by all things American: our food, our informality, our hospitality, our freedoms, our attitudes, our drive, our ambitions, and our quest for excellence.

Enjoy your 4th of July celebration, wherever you are!