April20

May 2017 – Lumber Update

By Paul Rogers,

The market spiked in mid-April, as the approaching deadlines of the Softwood Lumber Agreement countervailing and anti-dumping duties caused several mills to flinch, by either pulling off the market or raising their prices in order to protect themselves against the fees. While mills strategized their price levels, buyers were mostly unwilling to let the numbers scare them in to buying more than they needed. However, the timing seemed to be perfect (and almost calculated) as, with the threat of wintry weather finally removed, business activity picked up leaving buyers to question whether or not if they had bought enough to cover their potential needs. As sellers tried desperately to get in to buyers’ heads in order to learn their price limits how much interest was out there, many retreated or postponed once they realized that the hype wasn’t going to allow for an extended rally. It seems that most dealer’s recent business, overall, was and had not been as strong as what was anticipated and so many were overstocked with inventory. There are many moving parts affecting the lumber industry right now and, at this time, the market is quite volatile and seeking a direction. Most are anticipating that a 75-90 day sales cycle will be necessary to stabilize the market, which leaves something to be desired in terms of planning. Nonetheless, until a supply and demand equilibrium is realized, market conditions are apt to change daily, spiking and retracting. For the month of May (and beyond), we are well prepared ahead of this volatility, but please keep in close contact with your Shepley sales person for any upcoming projects in which you may need assistance.

One of the hardest things we are forced to do is to stop and find the time to concentrate and understand the information before us. One example are quotes, as we are often subjected to making sense of them in order to make a fair comparison which, we know, is no easy task. Trusting your resources is the first step, as having the faith that they have quoted you accurately and thoroughly alleviates some of the analysis but, ultimately, the onus falls upon you to ensure that they did. Although skimming through the contents and focusing on the bottom line may be part of human nature for its ease, it can also be a costly mistake: it’s imperative that the contents of the quote match your needs and your customer’s wants. This is an area that we excel at, as we have comprehensive methods in place that ensure that you have all that you need in order to be at your best advantage for quoting a job. In times of pricing volatility, our thorough quotes can be misconstrued as being higher priced, but know that, in this business, we are all working on similar margins in order to be competitive. If there is a big discrepancy, we are glad to hear it as we know that there is something awry. On your end, please don’t jump to the conclusion that the higher number is simply an over-pricing issue: quantities, accessories, sundries, species and grades are just a few amongst the many things that can have a profound effect on the bottom line of your quote. If you need assistance in helping to identify the differences, please don’t hesitate to turn to us for help: we are more than glad to help explain what we have presented to you and to help you decipher what you need to in order to make the right decision.

Despite all of the issues that are currently affecting our livelihoods, we are confident that we are the best building material professionals in our area who can and will do everything within our power to provide an ultimate service-oriented experience for our customers. We are in this for the long run and make it our collective goal to deliver upon your satisfaction! We hope you put us to the test and allow us to prove to you our worth.  On behalf of all of us, thank you for your past, present and future business!  

 

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