Lumber & Panels
Due to the extreme volatility in the lumber & panel markets, we decided to send a mid-month update.
Since the last supply chain update we distributed, which was drafted on November 30th, “random length” lumber prices have increased by 27% and Futures are presently trading 18% above random length print (see chart below). Note, prices are still well below the 2nd quarter, 2021 market peaks.
As we explained in our December 1st monthly update, the uptick in pricing was initially spurred by flooding in British Columbia, which impacted lumber production and especially distribution. Click HERE to view the full article. In addition, early in November, the British Columbia provincial government announced that it would protect 10,000 square miles of timberlands to preserve old-growth forests and biodiversity. Finally, in late November, Biden’s U.S. Department of Commerce administration announced they would double the tariffs in Canadian softwood that were established by the Trump Administration. Tariffs are scheduled to increase from approximately 9% to 18%. These cost increases for the mills and supply chain come as demand for lumber shows strength for both SF and MF construction.
A recent lumber market report explained that many Canadian mills continued to produce lumber even though B.C.’s rail lines were down due to flooding. Accordingly, some product will become available once cars can travel to and from the east. It’s unlikely this will ease pricing in the next 30-45 days due to year-end, holiday mill shutdowns.
Plywood (fir and yellow pine) has also increased 30% in December. These increases are driven largely by a perpetuation of the demand/supply imbalance. OSB, the panel more often used in Myers’s market, is up approximately 10%, while the “cash market” is trading above print with limited availability.
We will provide our usual month end update on January 1st with any changes to prices and lead times for all product lines. Since the price changes described above are so dramatic, we wanted to share this information immediately so you can take into consideration as you develop quote pricing and conditions for upcoming jobs.
Please note: in this market environment, it is difficult to make large volume buys beyond normal business purchases. Our focus is to secure inventory to keep your current projects on track.
Regards, Bob Wood
P: 717-792-2500 | E: [email protected]