Lumber Market Update
As communicated last month, we saw certain lumber market pricing begin to come down from the all-time highs we experienced in May. Lumber futures retreated more than 40% for the month of June and the overall number is down more than 18% for 2021. Most likely the cause being a degree of “normalcy” in our lives while people start getting back to summer activities and vacations and less focused on home improvements. Many committed larger jobs are finishing up and the demand has finally normalized somewhat to the production thus driving prices downward. We feel that the adjustment is a correction however, the demand is still active and there’s still a lot more construction still in the pipeline.
In May, new home construction was reported being down 8.8% from the 14-year high set in March and home improvement sales fell 8.1% as well due to record pricing and tight supplies. Those industry dips coincided with sawmills churning out more lumber, resulting in a somewhat improved supply and we lowered pricing mid-month on certain lumber products. There is still a lot of demand and work and the market will find the correct level barring no further interruptions. Let’s keep our fingers crossed regarding that, however we are now into the wildfire season out west and they’ve already begun.
At this point, we have not seen any reductions in Engineered Wood Product pricing as supply chain issues remain. Most products are still on allocation, communication is key in making sure we can fulfill larger projects.
The plywood market has remained stronger than the dimensional lumber market. We are still seeing allocations on certain OSB products, including Windstorm and underlayment. Communication is very important for larger size projects.
The treated lumber market has followed the same downward path as the doug fir market.