January31

Lumber Market Update – February 2020

By Paul Rogers

The market has been a tough read of late, as the season has been full of fits and starts. Overall, business has been good, but whatever activity that was realized (and believed to have had any sustainability) soon fizzled out, making many in the channel cautious with their buying decisions. As of print, the lumber market is continuing to move sideways, as the general strategy for dealers has been to buy only for immediate needs.  The market has responded to this mediocre demand with flat numbers and ample supply. The wholesale market, on the other hand, has been much more bullish—feeling that there is somewhat of a “bottom” at hand, and expecting prices to be higher as we inch toward spring. In response, many have opted to buy blocks of lumber (railcars of one dimension of varying lengths), with the confidence that pricing won’t be as low as it is now for some time to come—especially with the winter months concluding.  As inclement weather prohibits logging in many territories, it appears that it could be a good investment for those who have the cash and space to take it in.  Historically, lumber pricing does tend move upward toward the end of the first quarter of the year. Looking ahead, we can expect the market to be firm to up, with the only caveat being an impact from bad weather—which could potentially keep the market, once again, moving sideways.

It’s been remarked lately by many in the industry that the market has lost a lot of its predictability. Inaccurate predictions could be attributed to the sensationalism that is doled out by the media. Seemingly every day, new postings appear that cite the latest trends, lists, percentages, and opinions, with many of them contradicting each other. While all of these can lend a better understanding of current and future market conditions, many take too narrow or broad of a scope to get an accurate understanding of what will happen in our area. For instance, our preferred products typically stand away from the rest of the country, being traditionalists to the definition. We are not likely to use a lot of common building products that you would see in other areas as alternatives to our own (OSB versus plywood, fir over SPF framing, vinyl siding instead of white cedar shingles, etc.). As our own trends are well-defined by the authentic materials that have been used on Cape Cod for years, the rest of the building material industry has been busy embracing the newest alternatives – that we will still commonly shun. However, this is not to say that we haven’t made significant progress with items that weren’t commonly used a decade ago on Cape Cod (such as Azek PVC trim boards and Advantech engineered subfloor, both of which are lead products for their category). As with most things, it takes the brave of heart to try a new product. These “early adopters” are the ones that will likely enjoy the exciting benefits of a new product, but may also have to work through the issues that may arise. New products require our intensive study, but once we feel that we’ve done our due diligence and it gets to the stage that you hear us promote it, you can trust that we are confident in its performance, and will support it (and you) every step of the way. In addition, we work very hard at conveying feedback from the field to our suppliers in order to improve upon the product. Unfortunately, many of the authentic products of old are in their twilight years, so we are constantly keeping our eyes and ears open to learn and evaluate the “latest and greatest,” to best distill down what we think will be successful substitutes. However, we cannot evaluate their performance without our early adopters, who work with us on these new products (allow me to express our eternal gratitude to these pioneers). As to how these new products relate to market predictability, it can be said that no one knows what the future holds, but we can be certain that market trends and new products will influence and displace the demand on traditional items—effectively influencing future market conditions. It will be at the hands and influence of the early adopters (our industry’s pioneers), who will ultimately change and shape our future building material demands.

We are very grateful to have been blessed with a wonderful stretch of business, and have enjoyed being your supplier for the numerous projects that are going on across our region. Weather and market conditions aside, we do our best to provide you with quality products with exceptional service, and we appreciate every opportunity to do so. Thank you for your business!

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