July20

August 2017 – Lumber Update

By Paul Rogers,

In late June, the U.S. Department of Commerce delivered the second duty against Canadian lumber suppliers, the preliminary Anti-Dumping Duty (AD). Coming in at an average of 6.87%, it was below expectations but complemented the Counter-Vailing Duties (CVD) (which were posted in April at 19.88%), bringing the grand total of duties to a combined 26.75%.  Unlike the CVD, which instilled much consternation amongst buyers in terms of the potential negative effects it could have on pricing and supply, the AD announcement was met with little reaction. This was likely due to the fact that business was strong and so attention was drawn toward covering needs before the mills implemented their summer shut downs (which had their own effect on helping to creep prices up). However, it could also be safely said that the fatigue in dealing with price and supply threats surrounding both the CVD and AD duties had finally made most of those in the trade a little indifferent, especially considering that pricing was already reflecting the absorption of both duties before they were even announced. Nonetheless, the market seems to be steaming along and mills, who went in to their shut-downs with full order files, are coming back on-line to a modestly hungry market.  With favorable weather and what appears to be a common need to make up for lost time due to a wet spring, outtake for July was strong and so pricing remained firm. As we progress in to August, we can anticipate that pricing will remain firm and possibly climb, if demand outpaces production.

We often meet with sales people who have a keen interest in our business, and a common question they ask in order to gain a better perspective of Shepley is “What is most important to you for your business?” For the most part, their focus is typically product-driven, in that they are trying to lure business from you with the enticement of offering something that is exceptional for its category, aggressively priced or generally unique and different. However, unless your supplier is able to provide you with a quality item that is competitively priced and backed by superlative service (on-time, in-full deliveries, for example), what is important to you (getting the job done right, on time and within budget) takes a backseat to dealing with whatever will crop up from material issues, late deliveries or service when needed.  In our experience, it is common for organizations to claim high standards, but it is very rare for organizations to meet high standards. New suppliers come and go and, a lot of the time, they are able to enjoy some business as they work to prove their mettle. However, unless the directive for a quality offering and exceptional customer service is enforced from company leadership and subsequently becomes part of their culture (for long-lasting results), there is little foundation to grow upon. Without this foundation, they’ll typically resort to the path of least resistance: low pricing (of which, we all know, cannot be sustained for the long term). Aligning with exceptional suppliers is an important key to success and one that we put a tremendous amount of effort in to. When we are asked what is most important to us for our business, it’s a relatively easy answer: it’s to align with a supplier who has the same high standards as us and who understands the importance of delivering exceptional quality and service at competitive pricing. Anything short of that, we know, will prevent us from meeting our goals and that is just, simply, unacceptable.

We thank you for being our customer and, if you are new to Shepley, we hope that we can prove to you that we are the building material supplier that you want to use towards your future success. We fight for our livelihood every day and welcome the opportunity to prove to you that we are the building material supplier you want to be using for your project.  Thank you for your past, present and future business!

 

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