Current US Plywood Market

The Current U.S. Plywood Market in 2021

Plywood and lumber prices overall experienced an extreme spike in the early part of 2021, peaking in early May and dropping quickly to levels approaching but not yet matching pre-pandemic prices in July. Though concerns have surfaced that the price increase represents an early indication of general inflation, the overall consensus is that it’s due to a major jump in housing activities, mistimed mill shutdowns and supply and demand.

About Plywood

Plywood is an engineered panel consisting of three or more thin plies or sheets of wood with the grain arranged at right angles to each other. Once glued, these plies form a flat and thicker laminated sheet called plywood.

This alternating arrangement provides for a sturdy board that achieves exact dimensions and that’s economical to produce in a factory environment. Plywood also resists cracking or warping in changing levels of humidity.

Principal market segmentation for plywood is divided among residential and commercial projects and new and replacement construction applications.

Types include:

Softwood plywood made in the US mainly consists of:

  • Pine
  • Douglas
  • Spruce
  • Redwood

Advantages of Plywood

The popularity of plywood has increased due to its versatility and various advantageous attributes, including its decreased overall weight due to high-impact resistance, chemical resistance, high structural stability and strength-to-weight ratio, durability, stiffness, shear panel applications and dimensional surface stability.

Plywood Applications

The above attributes give plywood an extensive range of applications, including:

  • Furniture
  • Interior decoration
  • Construction and engineering
  • Flooring
  • Internal paneling
  • Vehicle interiors
  • Packaging
  • Molds for concrete
  • Boat-making
  • Others


House Construction


Key Plywood Industry Players

The top manufacturers and distributors for the plywood market in 2021 include:

  • Georgia-Pacific
  • Boise Cascade Co.
  • Roseburg Forest Products
  • West Fraser
  • Columbia Forest Products
  • Weyerhauser
  • RoyOMartin
  • Timber Products Co.
  • Coastal Forest Resources
  • Hood Industry
  • BlueLinx
  • Hardwoods
  • Dixie Plywood and Lumber Co.
  • South Coast Lumber Co. & Affiliates

Current Market Size for Plywood

For 2020, the value of the United States plywood market reached $8.48 million, according to IMARC Group. With a compound annual growth rate of 3.12% between 2021 and 2026, the expected value of the US plywood market is $10.11 million by 2026.

Rising Demands

The demand for lumber and plywood rose dramatically during summer pandemic conditions in 2020. Homeowners at home with no travel or holiday options spent more time and money on renovation and home improvement projects.

Weather and social unrest also played a part. Tornadoes and thunderstorms in southeastern and south-central US in 2021 and civil unrest in 2020 and 2021 prompted homes and businesses to board up windows and carry out post-storm re-roofing, also putting a strain on manufacturers and suppliers.

However, homebuilding in the fall of 2020, particularly for single-family homes, has had the biggest impact on demand. Seasonally adjusted housing starts for single-family homes reached levels not seen in more than a decade. The primary driver was low-cost mortgages.

The Housing Boom

In a low-interest-rate environment triggered by the pandemic, fixed-rate 30-year mortgages fell to record lows at less than 3%. Mortgage rates below 3.5% stimulate the housing market.

US Mortgage Rates

United States Mortgage Rate


The incentive to upgrade to a bigger or new house with more space appealed to people who had switched to working at home. But the bigger demand came from families who’d been biding their time to get a new home and who now saw an incentive to upgrade early through cheap mortgages. For every four houses sold, one was new. The historical average is one in ten. A backlog of orders resulted, spiking lumber and plywood demand.

This overall spike in demand was met with a reduced availability of lumber and plywood due to mill shutdowns. According to the National Association of Home Builders, the shortage led to an approximate $36,000 increase in the price of a new single-family home.


The low interest rates combined with the increased demand of people upgrading their house caused construction and plywood demands to increase.


A Delayed Response to Demand

A delayed response by sawmills has also played a part in high lumber prices. There are several reasons for this.

At the start of the pandemic in early 2020, sawmills reduced output and even shut down production in anticipation of a pandemic-related drop in lumber demand. The opposite happened, and the unexpected major increase in demand caught the sawmills off-guard.

U.S. New Houses

United States Housing Starts


COVID also played a part. Outbreaks among workers and an increase in pandemic-related health and safety standards impacted the pace of production.

Sawmills also encountered a diminished available workforce, making hiring difficult. Populations in small towns near mills have dropped over time. As well, opportunities in alternative employment, such as Internet-based work, and a societal emphasis on up-skilling and college degrees have also steered high school graduates away from manual labor. And pandemic stimulus checks lessened people’s interest in returning to mill jobs.

The construction of new sawmills has also become an issue. Even before the pandemic, lumber production started shifting from Canada to the US South. A mountain pine beetle plague, which has since spread to the US and Alberta, had damaged millions of hectares of forest and destroyed years’ worth of logging material in British Columbia.

As an alternative resource, forests in US southern states offer a substantial amount of raw material. But replacement mills in these areas take years to build, and new equipment backorders have also added to the problem, putting a strain on output.

Transportation has also lagged. An ongoing shortage of truck drivers has disrupted the supply chain connecting logging locations, sawmills and distribution centers, creating a bottleneck in lumber and plywood supplies.

The overall effect has been a high demand for plywood and lumber and a longer-term impact on price due to an increase in housing permits and housing starts.


COVID caused a decrease in workforce that had already been on a downward trend because of workers moving away from areas where sawmills are popular, this caused additional delay's on top of the delays from increased demand.


Plywood Market Outlook

Prices, however, have since peaked and experienced a rapid decline. Lumber futures have dropped from their high of more than $1,670 per thousand board feet in May to a more recent low of $540 in early August. The low doesn’t quite match pre-pandemic levels, which were closer to $300 or $350.

Where prices will stabilize and when they will be likely to return to pre-pandemic levels is unknown. Lumber and plywood demand and pricing will ultimately depend on low mortgage rates, which will operate as the principal driver of new housing starts.

Nevertheless, the lumber futures market, which allows commodity distributors to hedge future wood-product purchases and stabilize prices, serves to gauge market demand and consumer prices.

The general consensus among analysts is that prices will likely flatten or equalize for some time, though not as low as pre-pandemic prices. There are several reasons.

Balancing Supply and Demand

There has been a drop in demand. Given the still-high prices, some purchasers have chosen to wait out the price drop. And with the economic reopening across the US, homeowners have also had the chance to travel and take vacations rather than spend time and money on home renovation projects.

Supply and demand have also had a chance to equalize. US sawmills, working overtime by as much as 4 to 5% above 2020 output, have managed to catch up. In some cases, suppliers have even wound up with excess supply.

These suppliers are reluctant to sell at lower rates, though. While the demand for plywood and lumber futures may have dropped and shelves filled, these suppliers already purchased stock when it ran at premium prices. They want to avoid selling at a loss if possible, and actual prices could stay elevated as the material works through the market.

Non-Stop Homebuilding

Elevated prices haven’t developed in terms of a bubble but have instead tracked real demand. While prices did spike due to an earlier abrupt mismatch in supply and demand, at the root has been an uninterrupted and ongoing demand for homebuilding projects over the past year and into the next. Housing remains a primary point of focus and shows no sign of stopping.

According to the U.S. Census Bureau, total housing starts in the US for June 2021, seasonally adjusted, were up 6.3% compared to May of 2021 at 1.683 million and up 29.1% compared to June 2020.

A good indicator for upcoming housing starts and for future demand is current housing permits, which anticipate market data by two months. Permits for privately-owned housing units for June 2020, seasonally adjusted, were up 23.3%. Permits can give a picture of what to expect in two months.

A recent report in Business Insider also offers evidence of an enduring trend in homebuilding for at least a decade. According to the report, the US is short 6.5 million homes. At the same time, millennials seek homeownership.

There are several causes for this reported housing shortage. Existing homeowners are reluctant to sell, and prohibitive zoning laws and a labor shortage have made construction difficult. These contributors in combination with shipping delays and lumber shortages have resulted in far fewer homes than there are prospective buyers and a likely sustained homebuilding trend for some time.

Construction Site

Additional Influences

Transport volume is another consideration regarding future plywood prices. According to the Association of American Railroads and Yardeni Research, Inc., total US rail traffic was up in July of 2021 but loadings for lumber and wood products lagged somewhat behind housing-start rates.

In terms of lumber and plywood production, softwood production in both the US and Canada, which still supplies about 25% of US lumber, is up in early 2021. According to Madison’s Lumber Price Reporter, utilization of sawmill capacity in Canada had also made a substantial recovery compared to 2020 production while the US was running at good percentages above those of 2020.

Future Pricing and Price Normalization

Where the recent drop in lumber futures and plywood prices will stabilize remains uncertain. However, such considerations as sustained US housing starts, reduced but ongoing remodeling and the ability of sawmills to ramp up production rates can give some idea about the future balance between supply and demand and upcoming lumber and plywood prices.

At the root of demand are sustained housing start rates.


An underlying driver for housing starts is mortgage rates. At some point, low mortgage and interest rates brought on by the pandemic will again rise, possibly over the next two years. The incentive to buy a house will disappear with them. The demand for housing and lumber will further wane in kind, leading to more normal plywood prices.


How Silvaris is Helping Keep Costs Low

Silvaris opened its doors in 2000 with the dream of utilizing technology to help bridge the gap between hundreds of manufacturers, wholesale/distribution companies, warehouses, freight carriers, and retail operations. Early on, we adopted a focus on secondary markets, specializing in liquidation of the hardest to move products. We pride ourselves on creating solutions for companies that need to move these products yet still protect their primary material channels. Our customers enjoy the advantages of our long-standing supply relationships by the consistent availability of the products they need and creative solutions to supply problems. Our QuickBuys 2.0 application offers notifications on the offers as they are announced. 

Get started improving your bottom line while still getting the products you need.


Next Read:
The Current State of the OSB Market in 2021


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