Guest Writer
According to an Ontario producer, “The market in general has been poor because of weather conditions, especially in the U.S. northern states and Ontario and Quebec, so it’s been difficult to get the construction season started. Now it’s starting to happen. The market though has been better for studs, the pre-cuts, like the 104 and 5/8. These products are selling substantially over the print price at the moment. It’s the same thing for the 92 and 5/8”. It’s selling noticeably over the print price.”
A Quebec-based manufacturer also noted that, “The two by four and two by six pre-cuts are selling really well. That’s not new though, that’s been going on since the beginning of the year. We keep getting better than the published pricing for these items. And we can’t keep up with the market. We’re selling three weeks production like in the future, and we’re sold out on all these items. And now if we can get other types of products, randoms for example and MSR products, into the same bracket, the mills I think are going to be happy. That hasn’t happened yet, but I think it is coming.” Reported a Quebec wholesaler, “We can see the change in the marketplace. It is a very good, positive change, but that is very recent. It was only late last week it started to change. But again, it’s mostly a function of the season – being the weather.”
“The main reason we’re going to see a good market moving forward here, and when that will happen nobody knows, whether it’s four weeks or six weeks or eight weeks from now, is that there’s a lot less fiber available, especially in Eastern Canada,” noted an Ontario wholesaler. A Quebec-based manufacturer said, “That’s going to impact the market seriously, meaning that at some point in time, people will not be able to find what they need or what they want. We keep telling our customers that and we hope people are listening. But eventually they’re going to see that there’s a lot less fiber available because, for example, in the largest lumber producing region in Eastern Canada there’s been a shortfall of available logs and it’s creating a situation where there’s going be reductions in production from now until the end of the third quarter of 2023, which is going to severely impact the availability of lumber from Eastern Canada.”
“The Softwood duty is not really a factor right now,” noted an Ontario producer. “There was the reduction in duty a few months ago. And that’s made it such that it is not so much of a consideration anymore for us selling either side of the border. Many firms have their pricing structure such that they have no fear of going beyond what is allowable. So, everything is good on that side.”
The perspective of another firm from Ontario was, “We saw that everything was quiet, that everybody was just kind of holding off to see what’s going on. But now we see things are starting to pick up again, it’s coming back to normal. I wouldn’t say, that it’s going to be overwhelming or we’re going to be run off our feet, but, prices seemed to have firmed up in a lot of areas, Cedar, Pine, Spruce and Fir. Everything seems to be going pretty good. Our specialty products are doing okay. For lots of the specialty products, our staple items, we’re as busy as we had hoped. It is spring now and everybody’s kind of loaded up with what they need, so it’s a waiting game now until they get going. It is Canada and the snow’s just starting to go away and the weather’s starting to warm up, so we should start to get pretty busy here, and we are seeing a lot more inquiries.”
Noted an Ontario wholesaler, “We haven’t seen any major impact from the interest rates, which is not to say that the follow through in the next couple months, when people’s mortgages renew, it’s going to hurt them. But we’re kind of hoping that it’s going to stabilize a little bit, so we’ll see what happens. The outlook for the next six months looks good. I don’t think we’re going to go into a recession, by definition two quarters of negative growth, and they’re talking about at least a small increase this year in GDP. But I personally don’t think we’re going to go into any recession in the interim, except if they raise interest rates another two or three points. Then you could see a recession. There could be a lot of people coming due with their mortgages who qualified before and who won’t qualify at these rates.”
On the Pine side, “I would say that, February and March were pretty quiet which could be weather related,” one Quebec producer noted. “There wasn’t quite as much going on; that’s winter anyway.” Reported an Ontario producer, “The market was not dead but there’s a little bit more clarity there right now. Pine is pretty much holding its own. The lack of supply has helped in that regard. Prices are firm and we are getting lots of inquiries now.”
A wholesaler from Ontario remarked, “it’s not kicking off this spring like we’ve seen in other years, but I’m not worried about that. Other than some of the industrial grades, which have softened a little bit, I don’t see the upper grades changing at all. The supply isn’t there anyway, so I think everybody is kind of holding their ground on it.” A Quebec based wholesaler reported, “Pretty much any of the 2 and Better material is moving quite well. It doesn’t matter what width it is. Surprisingly enough, sometimes your narrows will be the first things to soften a little bit, but they are actually in quite good demand because the supply isn’t there.”
An Ontario producer reported, “The selects are doing well. In the U.S., the demand is good and it’s not like anybody can go anywhere else to get them if we don’t have them here. So that’s a good thing and a lot of it depends on the U.S. market, if it stays good down there. Everybody’s still buying local, which is good. We’ll have to see how it develops then. I would say early in the winter, it was hard to put a finger on it as to what the retailers were thinking out there. They knew it was going to slow down a little bit, especially in the housing, but I think we’re more optimistic now. The box stores are still doing quite well, so the cash and carry business there, it is still pretty good. There is pretty good demand on that.”
Noted one Quebec producer, “When we ask ourselves what do we see in the next three to six months, that is a loaded question. It really depends on the U.S. If they can maintain what they are doing at this point, without going into a recession of any kind, everything will be okay. I mean the demand isn’t going to be as high as the last couple years. With interest rates, I would suggest that anybody that has a project right now might be going to put it off. When they start feeling good about their monetary security, people spend money. Right now, I think everybody’s kind of keeping their cards close to their chest. I think the general public is going to be a little more cautious as to what they’re going to be spending. That’s probably the only thing that would cap our demand a little bit.”
“Transportation has not really gotten any better,” suggested a Quebec producer.
“There’s probably going to be a little bit more availability out there, but I don’t see anybody bringing the prices down, because fuel is so elevated. When you add in the last decrease in oil production just recently announced, that’s not going to help matters. We were kind of hoping that maybe the fuel prices would dip and we could see a little relief on freight, but that doesn’t look like it is going to happen. We thought perhaps with a little bit slower demand across the economy out there, the availability of trucks was going to be a little better, but it doesn’t mean that you’re going get a better deal.”
“Everybody’s pretty much finished up their logging for the season,” according to an Ontario manufacturer. “It’s obviously a winter thing. They have already got the material in their yards, either to be processed or, it’s already processed. Firms are pretty much topped off, to carry them through the summer months. It was a mild winter. It didn’t affect Ontario and Quebec as much as it did in the Northeastern states. It was quite mild there, with a lot of snow and they had some challenges keeping logs up at their log decks. This kind of kept some product off the market. But we’ll have to see how that transpires over the next few months. We got through it okay; it wasn’t too bad.”
