November 17 OSB Updates:
The southern Westcoast of B.C. and Northern Wa. had experienced a lot of heavy rain early this week which cause massive flash floods, land slides, swollen rivers as well as many other issues. Although it is unclear of the total extent of the damage there is a rough outline as to what we will be dealing with. Main Highways that are essential to the supply chain for the Vancouver area have been washed out or completely destroyed the government has stated that this could take weeks or months to repair at this point.
These highways are our main route for Tolko material to Delta B.C. as well as our Peace Valley LP mill. Northcoast reload (Delta B.C.) informed us that the reload is still above the water but that with the road closures in northern Washington it is unclear as to when shipments south will continue. The good news is the U.S. is much faster at fixing damaged roadways the current estimate is 1-2 weeks tops to have goods flowing again and we do have an abundance of material at Northcoast when trucks start rolling.
With highway damage out of the way we will move on to Rail damage, the latest update from CN and CP is that along with the highways rail lines have also experienced catastrophic damage. There are talks in place to start routing goods through Portland and Southern Washington. With this being said CN and CP are still assessing the damage with no timeline in place as to when good will start moving again.
The Western Mills are starting to all build their order files. Tolko has stated that the order file is pushed into late December and that the flooding issues shouldn’t cause to many disruptions in the short term. There are some wholesalers talking about another drop, don’t buy into this as historically in November and December prices tend to fall off slightly and some people are just trying to talk it down to garner deals.
Try not to buy into the negativity at this point as we are still seeing good demand all around. Our pricing on the west will stay at the levels we have been at for the last 2 weeks but we are open to looking at offers within reason.
November 11 Plywood Updates:
Western Fir plywood prices continue to slowly decrease with every week the mills attempt to extend order files. It appears many are relying primarily on contract business to keep pushing order files out. Most are week out ship or sooner in some cases. Downside risk has caused many to focus primarily on highly mixed loads and must have fill in wood. Despite concerns in the market’s strength, those buyers seem to be looking for delivery days after the orders are placed. Mill Grade availability continues to be tight. Prices have remained fairly firm despite the weakness in CDX. There is still a large price spread between CDX and the downfall that comes from it. I believe we will start to see more off grade in the upcoming week and prices will being to erode slowly.
Southern yellow pine inquiry and sales appears to be slowing down and being sold under current print to keep files moving. Mill grade availability in certain thicknesses is becoming easier to find. 23/32 off grade remains a little more elusive. I think in the coming week this will likely change and we will be seeing more and at potentially cheaper prices.
November 11 OSB Updates:
Construction grade prices have been consistently flat for the last few weeks. That trend does not appear to be changing.
That is good news for all of our industrial users. Downgrade OSB prices are still offer great discounts to the higher priced on grade. Availability is steady, but not overwhelming.
The buzzword these days is “supply chain shortages”. This reality is keeping many cheaper imported products out of North American markets, which helps in the current stability in prices.
Best not to sleep on these prices. If you need it buy it! While the doldrums of Thanksgiving and Christmas may create the illusion of oversupply, the truth is that 2022 is projected to be very strong. Housing needs have been underserved for too long and that stock needs to be replenished. And while no one expects prices to explode like they did last year, there is still a strong possibility of surges in demand and prices. Higher prices means more users searching for alternative supply like OSB downgrade, which only serves to put more pressure on the markets and customers we traditionally serve.
So, enjoy the relative calm of the next six weeks. Don’t get caught short. There are some great opportunities right now, but those will not be around forever.
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