Market Update: 2024 Wood Products Economic Forecast

The start of the new year has presented a complex landscape for commodity markets, including the panel sector. A significant factor has been the extensive, bitter cold weather affecting the entire nation, which has inevitably impacted commodity markets. This prolonged winter wave, particularly in the northern part of the country, has led to a notable slowdown in product shipments, creating a standstill scenario.

In many areas, there has been a natural slowdown in commodity product movement, further exacerbated by weather-related downtime at various mills. However, the situation is gradually shifting as the weather across the country begins to align more closely with typical seasonal temperatures and precipitation patterns.

During this lull, some buyers are attempting to negotiate with mills, often facing resistance. This period may introduce a temporary softness in certain commodities, yet it also presents a potential buying opportunity for astute investors. Conversely, some buyers may continue their usual strategy of purchasing only as needed. Pricing in most commodity panel sectors remains relatively stable, with occasional discounts offered to maintain market momentum.

As we progress into late January and early February, marking approximately the midpoint of winter, there’s an emerging trend of modest fill-in buying. This is not entirely unexpected. Looking ahead to 2024, there is cautious optimism, bolstered by declining mortgage rates which could potentially energize the housing market.

Nevertheless, the industry might experience heightened volatility this year. Inventories are being kept intentionally low across the board, a strategy that, while effective for some time, could lead to increased market fluctuations in response to even minor shifts in demand or production. Weather conditions continue to be an unpredictable factor, potentially influencing commodity markets in the short term.

Cover photo provided by Freres employee Jesus Saray.