According to a Quebec manufacturer, “The most recent curtailment out west did not greatly impact the markets, it’s kind of a non-event. We need a little bit more volume to be curtailed for it to have an impact on the balance in the marketplace. In the east, there’s talk that some of the larger mills may curtail around Christmas or stay closed a week or two weeks longer than normal. No one can tell you that for sure, there are no announcements yet. In general, there’s really an imbalance in the marketplace still. There are products that are doing well, for example, 2×4 16’s and No. 2 and 2×4, 104’s for example. Number 2’s as well, in stud, are doing fairly well. They’re still selling at a discount from the Random Lengths print pricing, but not at as deep discounts as seen a month and a half ago. Those are good products that are moving well, but in general the market remains a challenge.”
“Inventories are high and some wholesalers, they’re selling ok, but they’re not willing to put the numbers on anything else right now,” noted an Ontario producer. End users directly tied to the construction industry are doing poorly. They’re keeping a minimum level of inventory on the ground and they’re trying to replenish, as needed, and request quicker deliveries. It’s not an easy market. If you take a pulse of the people we talk to, their level of enthusiasm for the near future is low. So it’s going to be a difficult market at least for the first quarter of the year.”
A Quebec wholesaler said, “We take a look at the duty on a regular basis, and when we quote, we have our minimum price. But it’s not really a factor in the East. It’s more of a factor in the West, maybe because of the percentage of the lumber that goes towards the U.S. as opposed to Canada. Right now, the market is pretty soft, it’s been just like a downward spiral for many months now and we see some items that are usually strong, now selling for a low price. It’s a buyer’s market right now. There’s counters for mills and counters with different wholesalers. The buyers are looking to get everything promptly, so if you have something two or three weeks out, you can forget about that. It’s the end of the year, so customers want to keep their inventory low as far as tax purposes. It’s like we’ve been seeing for the last couple months, shopping for what you need in the near term.”
Another Quebec-based wholesaler indicated that “in the past two or three weeks, 2×6 had a little uptick. The 2×6 16’ was pretty much the most valuable item, but we’ve seen a drop in the last week or so. It is not that hot anymore. We’re hoping it will get better by spring, but it’s hard to tell. For sure, the mills don’t like to be at these levels. We saw the curtailment out west, which we don’t think is going to affect that much the American market, but it’s been affecting the futures. There’s not much money to be made for the mills at the moment because the demand is weak. Precut is super weak. As far as my clientele go, there’s still strength, as far as price for the white 2×10, 2×12, it’s holding up. It’s a specific item that the client needs and they’re willing to pay a premium on this. But as far as the rest, random lengths 2×4, 2×6, they are weak Right now, it’s the client who tells us what they want to pay, and we try to figure out what the mill is willing to let go.”
In the Pine market, an Ontario producer said that “given the time of year, things have slowed down, there’s no doubt about it. It is typical every year around this time, from hunting season right through to the end of January, it generally slows right down. It will pick up again, but the good thing is prices are still firm. Probably, on the lower grades, there might be a little bit of adjustment there, because Spruce has come down. People will use White Pine as an alternative, but when the Spruce is available out there, they’ll jump at that first.”
Noted a Quebec producer, “It’s probably only because of supply and demand, I’d say that any of the pattern material is in pretty good demand on the one and two. Only because nobody has it. So there’s pretty good demand on that. Boards are still moving pretty well, it’s not an issue there. I don’t see a change in the winter because of the supply issue. The one thing about the White Pine, there is only limited supply. It’s not like the Spruce where they can ramp it up and build the production overnight, you know? So it’s a little more stable that way.”
A Quebec wholesaler reported that “things have slowed down in the U.S., the housing starts are certainly down and that’s going to have a rippling effect in some of the market in Canada as far as finger joint grades and trim. So we’re already starting to see some of that slowing down as far as demand. But again, you’re taking in the time of year as well, this is not the opportune time for building. I think the numbers will still hold after January. On the very low grades, there might be some adjustment to do. I think as far as a three and better product, you’re going to be fine because of the supply issues.”
An Ontario producer indicated, “I think it looks good up until the summer. With the interest rates hike that the U.S. is imposing and Canada follows suit after that, it’s going have an adverse effect. It’s going to cost more to do things and if they can put projects off another year, they probably will. This might help bring the freight into grips, because you won’t have the demand on freight out there, so, people might entertain a counter offer. The logging got started around the 1st of September and the weather’s been pretty favorable. We could use some frost to help us stiffen the ground up, but, it’s not like we’ve been into heavy rains.”
An Ontario wholesaler thought the Pine market “seems to be okay for now, it seems fairly stable, pretty good. I’ve heard there are some softening on some grades, but the high end grades it seems in Pine are staying fairly stable. In Cedar, typically 4×4, 6×6, 2×8, 2×10 are still very strong because of the type of log they come out of. They come out of that bigger merchant gang log and there’s not a lot of that out there right now because the way the market is. The 2×4, 2×6 in 5/4, it has softened. It’s both the seasonality and we had that COVID rush and everybody is just being a little careful because of the economy overall right now. The good logs aren’t around, so the good high end Cedar, the quality stuff, we’re starting to see some firming. Looking ahead, I think it’s going to be sluggish. Guys won’t be as aggressive as they normally are. We have pockets where people want really high end Cedar, saying they’re going to be fairly busy and we have other pockets where they have nothing to go on, so it is certainly hit and miss. There’s no doubt about it, there’s been a pullback on demand. But with Cedar, I see it firming up a little bit. Everybody’s let their inventories go down to zero as much as they can get them, everybody is just hand to mouth, buying exactly what they need. That’s been going on for about six months now, in the Cedar. Nobody’s buying any more than what they think they’re going be able to sell or just enough to cover their orders. At one point though, prices will have come down far enough that the people who own the log, they can’t come much lower right now because they just don’t make any money.”
An Ontario-based distributor remarked, “Softwood lumber in general is soft. That’s the problem for the sawmills right now. If you look at the prices over the last six weeks, it’s kind of a slow bleed. People are trying to firm up when they can, but there’s just not enough interest overall. I’ve recently heard some people say that we might not see the deeper recession people were really fearing, because a lot of the prices of homes have adjusted down already. That would be positive.”
Noted another distributor, “in the Greater Toronto Area, which is a huge market, because there were a lot of homes sold in 2021 and the first half of 2022, the builders still are behind getting stuff built, because of labor and material problems. There’s still lots of areas where there is a tight supply of different products. Windows are extremely tight and people do still build some wood windows. They are still buying some white Canadian Pine for them too, but the market has transitioned to pvc.”
