|
|
 |
|
Publication Date: 7/2/2008 3:01:07 PM
LUMBER MARKET
Media reports detailing negative reports in new home sales, home foreclosures, and the economy cast a tone of uncertainty on the market. Curtailments and summer maintenance shutdowns have helped to alleviate the build-up of surplus inventories and will likely continue to do so over the next few weeks, but many producers worry that the indifference to those shutdowns shown by buyers may be a sign that prices could weaken once mills come back on-line. Producers attempted to hold their ground on price reductions, as most were reluctant to cut quotes by more than $5 to $10, although a large percentage of them routinely asked for “last look” on any potential orders. The vast majority of dealers refrained from taking positions; opting to limit purchases to short term needs with highly mixed quick ship tallies. Both Western and Eastern Canadian SPF posted very modest gains while Doug-Fir and Hem-Fir traded within a plus or minus range of $10. Southern Pine prices adjusted lower, although at a more modest pace.
SPF
Western S-P-F trading was surprisingly light considering the fact that the majority of Canadian mills scheduled maintenance downtime during the month of July. Producers worked diligently to hold firm on quotes and their efforts were largely successful as prices of all widths of framing lumber either held or posted very modest gains. #2 2x4 and 2x6 gained $1 and $6 respectively while tight supplies of 2x8 and 2x12 kept upward pressure on prices enabling each to gain $4 and $10 respectively. Eastern S-P-F #2 2x4 thru 2x8 sold steadily enabling producers to bump prices by $2 to $5. Demand for 2x10 slowed as buyers often chose to go with lower priced species of Western S-P-F and Hem-Fir. Sales were strongest into Canada, clearly outpacing those into the Great Lakes and Northeast Regions.
HEM FIR/DOUG FIR
Sales of Inland-Fir were spotty with White-Fir being the strongest seller. Recent curtailments brought inventories closely in line with demand; consequently 2x6, 2x10, and 2x12 all netted $10 gains. Orders for 2x4 and 2x8 declined, but producers managed to hold prices at previous levels. Coastal-Fir markets were marred in a sales slump and prices softened by single digit amounts. Producers initially held the line on quotes, but more often than not accepted modest counters in order to procure the sale. Some double digit discounting occurred on the limited number of volume orders that were placed. Dry Doug-Fir #2 2x8 gained $5, but other widths were sideways.
SYP
Numerous mill curtailments scheduled for the week of June 30th prompted most buyers to procure an extra weeks worth of safety stock; however most treaters and dealers continued to play it conservatively, limiting additional purchases to mixed truckload tallies. Upcoming curtailments are expected to bring mill inventories closer in line with demand and ease downward pressure on prices. For the time being prices continue to erode, but at a decelerated pace. Prices of 2x4, 2x6 and 2x10, which had been eroding by double digit amounts for the past few weeks, fell by single digits. Overvalued 2x12 incurred the greatest price corrections posting $16 and $22 declines in the Central and Eastern Zones. Timbers weakened as 4x4, 4x6 and 6x6 posted $5 to $15 price declines. Standard decking lost $10 on light trading and Premium showed sings of cracking. Trucking shortages continue to cause shipping delays in all areas of distribution.
GREEN FIR FRAMING LUMBER
Dealers held to their conservative replenishing mode, sticking with mostly quick ship truckload orders designed to fill inventory holes while steering clear of volume purchases. The strongest demand for mills continued to come from reloads and distribution yards. Recent mill curtailment efforts have successfully limited output; however the drop-off in demand has more than offset the reduced production and subsequently led to downward pressure on prices of framing lumber. Narrows lost $10 to $15 as producers cut quotes in an effort to entice buyers off the fence. Interest in wides however was steady and mills managed to hold prices close to previous levels.
PANEL MARKET
Panel product markets continued to be mixed as traders searched for comfortable trading levels. While some producers continued to focus on clearing accumulations at discounted levels, others struggled to generate customer interest too much beyond the holiday week. While producers anticipate a round of buying due to shutdowns around the holiday week, buyers contend that most of July needs have already been purchased and that additional needs would be modest at best. As fuel costs continue to rise and rail companies announce rate hikes, the challenge to find “prompt” shipments or “guaranteed arrival dates” is becoming more elusive. Even so, the “need to bolster safety stock levels” appears to remain unwarranted.
FIR PLYWOOD
Producers failed to extend lead times out another week despite upcoming summer shutdowns. After last weeks round of buying by wholesalers and dealers replenishing depleted inventories, buyers backed away from additional purchases at higher mill asking levels. Although published prices showed price gains of $4 - $10 on sheathing items, prices of sanded, siding, and underlayment items remained unchanged. Truckload purchases became the norm by the end of the week with buyers in general returning to the sidelines as the week progressed.
SYP PLYWOOD
Sales at the mill level remained active as producers fielded solid inquiries. Some buyers expressed concern over tight trucking availability during the upcoming holiday week and became more willing to purchase an extra prompt load to get them through. Others however monitored inventories even more closely in an attempt to get through to the next month before replenishing again. Prices bumped up moderately on sheathing items as lead times pushed past the first week of July. Prices for AC and BC sanded panels held to the previous weeks levels for the most part while siding items remained unchanged. Prices of underlayment items took minor adjustments in either direction. Lead times for pine plywood ranged from the week of 7/7 to 7/14.
OSB
Mills rejected the steepest double digit counters making it tough for producers to sell to an overall disinterested customer base. Producers who were willing to deal, did so selectively and sold enough to book into the week of July 7th for the most part. Those who were able to boast 7/14 lead times were unsuccessful in enticing buyers to look at additional needs and inquiry level dropped off to next to nothing. “Prompt” loadings were sought out through the week but still some secondaries reported difficulty moving off contract loads. Getting drivers to commit to delivery dates became more difficult, and traders anticipated an even stronger challenge as the holiday approaches.
[ PAST PUBLICATIONS ]
|
|
