March23

April 2016 – Lumber Update

by Paul Rogers,

Improving weather and an optimistic outlook for spring business has finally breathed some life into the market, although maybe not as much as most would have hoped. As compared to last year, when many job sites were still inaccessible and wholesalers and retailers alike were mourning the loss of their first quarter sales, pricing was (surprisingly) higher than we find it today. The Random Lengths Framing Composite is lagging by 10% when compared to this same period in 2015 but, unlike last year’s weather-related woes, the deflating Canadian exchange rate and sagging Chinese market has had the Canadians nervously seeking out business and tightening production. The upside is that most retailers are reporting that there is a considerable amount of business to be realized in the next few months, which is great news as our mild winter had us all wondering if we were cutting into spring business. Because of this confidence, buyers have been active and the outtake is helping to prop up and raise costs. However, like we’ve seen all too often, this optimism usually overshoots the reality so an expansion and contraction of market pricing is quite likely. Looking ahead for the month of April, we can anticipate that strength in the market will give a boost to pricing but it will likely be quelled as supply and demand come into balance.

As we often mention in this article, we choose to do things differently than many other yards because we are committed to “doing the right thing”. Specifically, this means that we will make the decisions that are in the best interest of our customers, employees and company, and we are proud to say that most of our products reflect these decisions. There are many choices to make in the building materials trade, not the least of which is what type of product you use and what price you will pay for it. While for some all decisions are based upon price, we never see it that way: to quote Warren Buffet, “Price is what you pay; value is what you get”. We have great products that we can apply this observation of Mr. Buffet’s to, such as No Prior Select (NPS) and Premium Lumber, CCX Plywood, Maibec and Certainteed Shingles and Bodyguard Trim Boards (among many others). The most recent, however, is our pressure treated stock. You may recall that, almost a year ago, we took a stand and switched out our MCA Above-Ground (AG) .06 content pressure treated for a version that is “Ground-Contact” compatible, MCA Ground-Contact (GC) .15 content. Brought about by a few instances where we had seen short-term failure in its final application, we quickly realized that the right thing to do would be to do the right thing: eliminate the risk and embrace the better product. Although the price was higher, the value that we got far exceeded the savings and the risk. A year later, the AWPA (American Wood Protection Association) has adopted a new standard mandating that pressure treated wood that is being used in a susceptible-to-rot area (6” or less in proximity to the ground, apt to have detritus build up, in direct contact with untreated wood, poor ventilation or in a difficult to service area, amongst other criteria (see your Shepley salesperson for a full list)) must be treated for….MCA Ground Contact .15 content. Thankfully, we are beyond this conversion and have had a successful year with our pressure treated ground contact stock. However, we are still striving to continue to improve upon our program by having finer stock, which we hope to show you is the best looking material on Cape. Without any doubt, price does matter but the value of what you are buying has to be in direct correlation to it. Value in knowing that we can trust the performance of the material we sell, value in knowing that we are doing the right thing for our customers and value in knowing that we are doing our part to elevate our industry speak to our core values, but knowing that we can do it at a competitive price is what makes us Shepley.

We are excited to finally have the mild weather and longer days return, but wasted no time during our “off-season” as we were busy honing our skills to better serve you. Should you have any questions or concerns with your project, please contact your Shepley representative and as always and most sincerely, thank you for your business!

 

 

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