September 30, 2022                               

HURRICANES, LABOR STRIKES, AND BEAR MARKETS – OH MY! The final week of September offered zero, zip, zilch, as far as positive news, as doom and gloom were present in every direction. From Hurricane Ian hammering Florida, the stock market hitting new lows on the year, and skyrocketing interest rates, I think we are all glad the weekend finally arrived. With so much pessimism in the air, one may ask themselves how the lumber market fared? Great question! To find that answer and more, continue reading and check out all that transpired this past week in the place I like to call: ‘The Wonderful World of Wood”. Enjoy…

Trouble in the west kept the market in check, as the Weyco labor strike put a slight damper on supply chains amidst the bearish market sentiment. As a result, 2×4 2/Btr KDHF added to the previous week’s losses, as it finished lower. However, 2×4 2/Btr KDHF added more than 3/4% this week, creeping higher from the last week’s unchanged activity. As a result, 2×4 2/Btr KDHF has lost 5% over the past month while standing 7-1/2% above its late-September 2021 level.

Taking a page from its narrower counterpart’s book, 2×6 2/Btr KDHF found some strength amidst the market’s weakness. 2×6 2/Btr KDHF gained ground, ending up nearly 2-1/4%, as it slowed the declines from last week’s unchanged effort. As a result, 2×6 2/Btr KDHF finds itself down more than 4% during the past 4 weeks while remaining more than 1% above its price point one year ago.

As September closed, 2×10 2/Btr KDHF finds itself in a stagnant pattern, closing out the week unchanged and halting the previous week’s more than 1-2/3% falter. Over the past month, 2×10 2/Btr KDHF is now lower by nearly 5-2/3% from where it was 4 weeks ago while standing roughly 28-1/3% above its late-September 2021 level.

2×12 2/Btr KDHF managed to escape the week unchanged, putting the brakes on the previous week’s near 2% gain. Looking back over the past month, 2×12 2/Btr KDHF comes in even-steven compared to its late-August levels while positioned nearly 4% above its trading level posted precisely one year ago.

Green DF Timbers applied the parking brake over the previous few weeks, finishing unchanged yet again, mirroring the previous week’s unchanged effort. However, over the past 4 weeks, Green DF Timbers are up more than 1/2% while still standing a solid 44% above their late-September 2021 levels.

Over the past couple of weeks, 2×4 Western S-P-F 1650fb MSR has remained in a mundane pattern, closing out the previous three weeks unchanged. However, as 2×4 Western S-P-F 1650fb MSR enters Q4, it stands 6-1/4% lower over the past month, nearly 13-1/2% below its mid-September 2021 level.

The trustworthy canary in the coal mine continued its efforts in recent weeks, as additional softness was prevalent. Awareness of recent strikes came to the forefront but did little to significantly bolster any upwards spark. As a result, 2x4x8′ PET KDHF Solid Studs coasted into Friday unchanged after peeling off more than 3-1/4% last week. As we end September, 2x4x8 PET KDHF Solid Sawn Studs now stand 9-1/4% lower over the past 4 weeks while positioned just 4-3/4% above their late-September 2021 trading levels.

2x4x9′ PET KDHF Solid Sawn Studs followed a similar path to their shorter cousin’s effort, as they too coasted on the previous week’s edge higher, closing out this week unchanged, a pause after the previous week’s 1-3/4% dip. Over the past month, 2x4x9′ PET KDHF Solid Sawn Studs dipped well more than 10-3/4% compared to their late-August levels while positioned upwards of 6-1/4% below above their price one year ago.

Even as demand remained steady, 1/2” CDX plywood succumbed to the market woes. As a result, 4x8x1/2” CDX Plywood fell as the week and month expired, dropping 4-1/4%, easing back from the previous week’s 5-2/3% plummet. Over the past month, 4x8x1/2” CDX Plywood finds itself lower by 17-1/2% while remaining positioned more than 10-3/4% above its price one year ago.

4x8x3/4″ T&G UDLX Plywood continued lacking any spark, as sluggishness was its best descriptor. As a result, 4x8x3/4″ T&G UDLX Plywood nudged lower by 4-1/3% over the past week, halving the previous week’s more than 1-1/2% falter. 4x8x3/4” T&G UDLX Plywood is now lower by nearly 10% over the past month while positioned about 10-3/4% above its late-September 2021 level.

HURRICANE – SMURICANE! For old-timers like myself, we can recall the times when hurricane season struck fear in the minds of builders. Insane price escalations ensued in the early 1990’s that sent pricing sky-high. Those days are long gone, as the pending devastation of Hurricane Ian did nothing to perk up the weary OSB market. For the week, 4x8x7/16” OSB reacted in a lackluster fashion as the economic woes far outweighed any uptick in demand. For the week, the Commodity King” was far from a king once again, as  4x8x7/16” OSB wrapped up this week unchanged, pausing after the previous week’s dip of 1-1/2%. The king ends the past month down more than 10-3/4%, as it is now more than 29-3/4% under its price point from precisely one year ago.

Continued sluggishness in the CDX plywood panel sector helped to close to the 7/16″ OSB vs. 1/2″ CDX DISCOUNT, ending the week at 41.6% versus last week’s 44.1% mark, which is a far cry from last year’s 7-3/4% discounted level.

4x8x23/32” T&G OSB hung tough this week as it shifted gears into neutral. Unfortunately, this week offered little to add momentum in either direction, as 4x8x23/32” T&G OSB wrapped up the week unchanged, pausing after last week’s mere ¾% decline.  Over the past month, we have seen 4x8x23/32″ T&G OSB drift lower 6-2/3% while leaving it nearly 28-1/4% under its price point from one year ago.

An uptick in activity in the plywood sector helped to shrink the gap between plywood and Oriented Strand Board, as it finished the week at a 47.1% DISCOUNT, a touch lower than last week’s 49.4% mark.

A glut of inventory, combined with lethargy from buyers, kept pricing tilted in an erosionary pattern. 2×4 2&Btr Kiln Dried Spruce-Pine-Fir Western Mill came into Friday lower by upwards of 6%, adding momentum behind the previous week’s 2-3/4% decrease. The past month has not been kind to the 2×4 2&Btr Kiln Dried Spruce-Pine-Fir Western Mill number, as it has now fallen more than 7-3/4%, while it stands upwards of 11% below its price point posted precisely one year ago.

The current front month of November 2022 faced more headwinds as pricing continued to drop, closing with a 10.57% discount compared to the previous week’s 13.86% discounted mark.

Looking out next year, January 2023 followed the market’s deteriorating pattern, ending the week with a 6.34% discount, easing back a touch compared to last week’s 9.7% mark. Likewise, March 2023 declined with the market, closing at a 3.43% discount, plummeting lower from last week’s 8.69% mark. Finally, the May 2023 contract followed the bearish tone over the last few weeks, concluding this week at a 1.2% discount, moving lower from last week’s 3.15% discounted mark.

Jim Schumacher
Shoe’s Lumber Report
(425) 219-6118