June22

July 2017 – Lumber Update

By Paul Rogers,

With what can be described as a general malaise, the lumber market had plodded along for weeks with no clear direction of what to anticipate for activity. Although prices retreated somewhat from the high levels they hit leading up to the U.S. Commerce’s countervailing duties announcement on April 23rd (levied against Canadian lumber suppliers), prices didn’t really come off as much as buyers had expected. Mills held fast on their prices, with the expectation that buyers would be needing to replenish out of necessity. Buyers, on the other hand, had bolstered their inventories well enough in advance of the duty announcement and so had little need for prompt material (other than spot orders to fill holes in their inventory). Further compounding the lack of demand was a lousy stretch of weather that repeatedly created delays and postponements for contractors. Pricing did come off very slowly and modestly, but eventually flattened out and even ticked back up as weather improved and demand increased. Nonetheless, an air of trepidation hung over the market, what with annual mill summer shut-downs looming and the presumption that delayed work could abruptly materialize over the summer months….or not. Because of the uncertainty, the market remained relatively volatile with short bursts of activity that also dissipated quickly. As of print, supply and demand appear to be in equilibrium to the effect that should keep prices flat for July, with a small risk for upward movement.

Historically speaking, sales are usually flat during the summer months so turning (selling and replenishing) lumber supplies can become a challenge. A critical point to preserving the quality of inventory is to protect it from the elements as, particularly for the summer months, sun exposure and humid conditions can wreak havoc with the stability and overall condition of wood. With what our industry calls “yarding”, oftentimes wood that is exposed for too long can become cupped, cracked, checked and warped, rendering the product useless for anything other than firewood. It goes without saying that there is a significant profit loss that can be had for this kind of deterioration and waste, so it’s imperative that suppliers take the strides to do what they can to protect their material before it’s too late. Some lumber yards have the luxury of indoor storage or sophisticated racking systems that keep the material well-sheltered (as we do: come see our Auto-Staks!). However, oftentimes it cannot all be stored inside which is why we diligently protect our lumber and plywood by ensuring that it is covered with breathable covers that not only protect the wood from sun damage, but also allows air flow so that moisture can escape, avoiding mold and mildew. Although many mills already cover their lumber for us, many do not, which is why we take the extra step in buying and applying these covers to our wood when needed. We sincerely feel that this kind of preventative maintenance is necessary, and it is only one example of the many things that we do to our stock (such as end-sealing, dunnage sheeting, poly-bagging and palletizing, amongst others) to ensure that the material we sell you is well preserved and in the best condition. With the threat of high heat and humidity during these summer months, we encourage you to take the same care while the material is at your job site by doing what you can to keep the material covered, out of direct sunlight and allowing some sort of air flow, which will all help to ensure that the material will be in top condition in time for your personal use.

We look forward to providing you with the better service and products that you deserve, and providing the ways and means for long term success for both of us. On behalf of all of us, thank you for your business!

 

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