By Richard Lipman
Guest Writer
As the summer rolled on, one Quebec manufacturer said, “Eastern SPF prices have skyrocketed. It is over 25 years that I have been selling lumber and I have never sold Spruce lumber at this level, ever in my life time, even if you include the rate of inflation.”
According to an Ontario wholesaler, “I do not see this slowing down any time soon. I predict we are going to finish the year in or around these numbers. It may slow down at Christmas and for the beginning of January, during that traditional holiday slowdown.”
An Ontario manufacturer noted that “until there is a true adjustment, until there is no discrepancy between the supply and demand ratio, and right now the supply is low and demand is high, in comparison to productivity, things will not change. We don’t expect productivity or production to increase any time soon, at least over the next four to six months.”
A Quebec manufacturer, fresh off the provincial construction holiday, remarked that “SPF has taken an awful big shot upward in pricing and I am pretty confident it will stay that way right until December. In the winter months, building slows down a bit and things might drop some at that point, but other than that, I don’t see any end in sight in terms of prices coming down.”
An Ontario wholesaler noted that “people are scrambling to find material and there are a lot without it. We hear of people are driving to other provinces because their local retailers just don’t have stock.”
A Quebec wholesaler said that he “expects demand to remain high for one reason, which is because the supply is not there. It is not because demand can’t be higher, because it can. It is because there is no product, and I don’t care what product you are talking about, be it lumber, OSB, plywood etc.”
A producer from Quebec felt “this is an effect of COVID-19, but it really started before COVID. Lumber demand was good all throughout North America. There was very little lumber in the pipeline because people were buying, and then COVID hit. Dealers and buyers decided they were going to stop buying to push the prices down, even though some of the states and provinces shut down because of the virus.”
“One thing for sure,” said one Ontario wholesaler, “in most states and provinces, if you had a building permit, you were able to still work and build and finish your job, and the reality was you could not get a new building permit. People obviously didn’t want to leave their jobs undone, so guess what? They continued to work and therefore continued to consume wood. From the job site you saw that retail went to distribution and cleaned them out.”
Meanwhile, according to an Ontario producer, “We continued to ship and sell lumber, however all of us, or at least 90 percent of us, either took downtime or shut down completely for anywhere from two to six weeks. And what happened was that even the sawmills depleted their inventories and when we decided to re-start, it was because the demand was good and the prices were starting to creep up again. By the time we started production, we have yet to be able to have normal inventories. The minute production is on the ground and there is enough for a truck, it is loaded and gone because it is pre-sold and order files for sawmills are now out to mid-September, for most mills I would say.”
An Ontario wholesaler reported, “Prices have gone beyond $800, everything being sold starts with a 9 and we have even sold lumber at more than a $1000 today. There are no shipping problems or logistics issues across the market at present.”
“Pine markets have been busy,” according to one Quebec wholesaler. An Ontario producer reported that “the big box stores got slammed pretty good, so business is good that way and I believe that can continue for a while yet.”
A manufacturer from Quebec said, “With the extra time people have during COVID, they are now doing those projects that have been put on the sideline for a while, those project are now on! This has been a nice shot in the arm for sure.”
According to a Quebec manufacturer, “Pattern stock for interior walls and siding has been a pretty good mover this summer, which is good for those that have the material to make it. Overall, our pine prices are far more stable than spruce because it is basically supply and demand.”
An Ontario producer did indicate that “we are looking to put increases out and these could be coming very soon, in the next month or so, because the markets are out there and it warrants an increase anyway.” One of his Quebec manufacturing counterparts noted that “production in the states has been curtailed quite a bit and the shortages down there drive the US market. We still have a lot of facilities/mills that border the states that buy a lot of U.S. wood to make their components, whether finger jointed or whatever it might be and they are having to pay more too. So it is only fair that we should bump our prices up a little bit also.”
In terms of grades, said one Quebec wholesaler, “The market is tougher on the Selects right now. They do move, but not to the extent that some of the other products are moving.” An Ontario wholesaler reported, “These are high-quality finished goods but there are just so many engineered products out there that kind of replace them, with moldings and things of that nature. For a natural wood product, it is a tough game. All the other grades seem to be going quite well.”
It is interesting that in such good markets the labor issue keeps coming up so regularly in conversation. One manufacturer from Ontario complained, “We can’t find people who want to work. The Canadian Emergency Response Benefit (CERB) is having some impact and because workers are getting this relief during the pandemic, some say that employees can get more money staying home than they get at their jobs. We hear this is the feeling by some in the U.S. as well.”
Said another Ontario manufacturer, “This is an easy thing to point fingers at right now, but this has been going on for a while, I think seven or eight years, so this is definitely from well before COVID hit. And this is not going to change – there are a lot of people who don’t want to put in the work – and it is going to be a tough go to find people to work for us.”
