Coming off of record highs, lumber pricing continued to tumble in July. Although the industry as a whole is still quite busy, sales were not as vigorous as in previous months and it appears that the supply chain is replenishing sooner than anticipated. Having plentiful inventory on the ground would sound like a great position to be in after dealing with months of outages, but many suppliers’ material was purchased pre-price collapse, so now the challenge is to sell off the higher priced stock and replenish with current and much lower valued material. As a result, retailers are holding fast on buying any stock (in order to reduce their inventory and buy at the bottom of the market), traders are desperately trying to sell off their lumber (but finding few takers) and mills are watching their order files thin out, hoping and certainly expecting a pop of business soon. Supporting the mill’s expectations of business, many of them close down for several weeks during this time of year to retool, which typically puts a crimp on supply. It will soon be seen if the lack of production by mills versus the inventory stores of dealers and distributors will have much of an impact on August pricing, as a new round of buying may be occurring upon the mills’ reopening. We are also in a key month for buying for fall business, so the general consensus is that we are very close (if not at) a bottom to the market. Depending upon the pace of construction over the next few weeks (and how much inventory is in the barn at the retail level), pricing could go up, down, or remain seated. In any event, we wouldn’t expect at this point for wide swings in either direction so, for August, we anticipate pricing to be status quo, with the potential of a bump up at the end of the month.
Turning (selling and replenishing) lumber at this time of the year can be a challenge, as business usually slows down as we all take advantage of the summer while it lasts. As a dealer, we have to be very careful to rotate our inventory so that the stock that was first in is also the first out. One wouldn’t think that lumber and plywood have a shelf-life, but it does as it is very susceptible to sun and moisture damage, otherwise known as “yarding”. If you have the opportunity to drive through our yard, you will see that we are careful to cover any lumber and plywood that will be exposed to the elements for any length of time with either with a lumber cover or a sacrificial layer of stock that is meant to protect the layer it is covering. Ideally, storing stock in a cool spot with good air flow is the best option, but not a luxury that any of us generally have. Most especially in August, the intense heat and humidity can have a very swift and harmful impact on the condition of these products, so diligence in covering and recovering material will pay off in dividends if you wish to protect it from sun damage. In most respects, sun damage can render a board useless as it will quickly turn yellow and then gray due to sun degradation but, more damaging, is the checking, cracking, twisting, and cupping that will occur when the material becomes too dry from baking in the sun, whisking away any moisture that would otherwise keep it stable. Conversely, high humidity also presents a serious threat with mold and mildew, which will occur from repeated cycles of trapped moisture and heat. The best course of action is to protect it from direct sunlight if possible and allow plenty of opportunity for ventilation by leaving an airspace on all six sides. Covering it with a breathable material (any of our provided lumber covers will do) and keeping the stock elevated on blocks, pallets, or saw horses is paramount. Especially for what today’s costs are for lumber and plywood, it’s critical to protect this material as the loss can have a profoundly negative impact to your bottom line. On this topic, we are big endorsers of end-sealing, and end-seal many of the products we keep in our Auto-Stak racking systems. Although it’s mandated on pressure treated items and most wood decking, it is also a best practice on any other wood product that may be susceptible to the elements. We sell end sealers for all of our wood products, and highly recommend their usage as they are an all-around good investment. Overall, you can’t go wrong doing whatever you can to protect your purchase, so please consult us if you need any help in achieving this important step.
It is hard to believe that we are already in the last full month of summer, but it’s a good time to take pause and enjoy some of the wonderful features that living on Cape Cod can bring while the time lasts. From all reports, it appears that we’ll be hitting the ground running with regard to fall business, so taking advantage of the best time of the year to recharge and enjoy what we work so hard for will surely replenish your energy for what’s right around the corner. On behalf of all of us at Shepley, we are sincerely grateful for your business; thank you and have an excellent month!