Lumber Market Update-March 2023 | Shepley Wood Products
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Lumber Market Update-March 2023

The market rallied early last month, as a combination of factors spurred buyers to get off of the sidelines and buy while the timing was right. This abnormally mild winter has afforded the pace of construction to remain strong and as dealers were seeing their inventory levels slide (and knowing that prices were reaching a critical bottom), most buyers stepped in to secure their needs for at least the next few months. However, further adding to the excitement was a well-timed announcement from Canfor (who is one of the world’s largest producers of sustainable lumber, pulp and paper but most importantly a major producer of Western framing lumber) that they were permanently shutting down one British Columbia mill and temporarily shutting down another in order to facilitate a “major redevelopment”. These closures will remove approximately 750 million board feet of annual production from the supply chain which, by most estimates, represents almost a 5% decrease in available lumber. With this news, a frenzy ensued and buying kicked in to another high gear. However, it was short-lived as it quickly became clear that buyers were satisfied with their purchases and had retained a conservative strategy by not sticking their necks out too far, based upon the persistent uncertainty of market conditions and knowing how fast economic winds can change. By the end of the month, the market settled and started to crack and traders were back to actively soliciting business to move product out but at new, higher price levels thanks to the rally. Currently, the market remains calm but business continues to be strong and, with spring at our doorstep, it’s likely to increase. Taking this in to account, we feel that prices will moderately fluctuate for the foreseeable future as we enter a new price discovery phase.

It’s a well-known fact that today’s wood fiber is not what it used to be even a few short decades ago, as the depleted volume of old-growth lumber and the impact of environmentally managed forests has forced our industry into using different species, newer growth timber and alternatives, such as engineered wood.

What isn’t such a well-known fact is the evolution of our modern day pressure treated lumber. Although it’s still Southern Yellow Pine, green in appearance and has a reputation for being impervious to rot and insect damage, it has gone through many changes over the past two decades that makes it quite different from the old. Many of us are well-aware of decks that were installed twenty plus years ago that are still in excellent shape. This material was “CCA .40”, an acronym for chromated copper arsenate (comprised of chromium, copper and arsenic) and the retention level, “.40”, which is the amount of preservative retained in the wood following the treatment process, measured in pounds per cubic foot (PCF). The particulates in CCA are dissolved in a solution and, as in all pressure treated items, boards are submerged in the solution under intense pressure, pushing the chemicals in to the board, essentially coating the fiber. Saturation is typically most heavily concentrated around the perimeter of the board, as penetration becomes harder to achieve the deeper you go. This often explains why, if you do come across a rotten piece of pressure treated wood, it often starts in the center or in areas of penetration. For the most part, cutting and installing the very green-in-color CCA was a breeze: there was little concern to best practices (such as end-sealing or using joist tape) or application, as the copper and arsenic are an effective fungicide and insecticide, keeping it safe from harm. Unfortunately, what made CCA great also made it an environmental concern, as the level of arsenic in the solution made it a potential health hazard in the event that it leached out (as it’s an element that can increase the risk of certain types of cancers). The EPA (Environmental Protection Agency) deemed that it was too hazardous for residential use and so mandated changes in 2001 to prohibit CCA from being used residentially by 2004. Acknowledging the risks, manufacturers elected to voluntarily change their formulations and so converted prior to the deadline. Although banned from recreational use (such as decks and playgrounds), CCA is still available today for certain industrial applications. The new solution was ACQ (alkaline copper quaternary), but in two retentions: ACQ .20 Above Ground and ACQ .40 Ground Contact. Unlike the old CCA formula, ACQ contains no arsenic but had a high copper content. It is here where we turn our next corner for issues as, prior to going to ACQ, we didn’t have to specify “Above Ground” or “Ground Contact”. “Above Ground” or “Ground Contact” was a matter of interpretation by the end user: unless it was for “burial”, CCA .40 was seen by most users to be fine to use in contact with or in proximity to earth. The industry made a big mistake in its assumption here, as the success of ACQ relied heavily upon knowing its intended use and choosing the right product for the application. Initially, ACQ .20 Above Ground was the only option typically stocked by dealers: it was commonly sold for every application and without too much concern as to how it was to be applied, as the differences between ACQ .20 Above Ground and ACQ .40 Ground Contact versus CCA .40 were not communicated well. Unfortunately, it was discovered too late that the high copper content in ACQ .20 was a major problem for wherever the wood was in contact with metal, as fasteners and hangers soon corroded to the point of failure. This resulted in another change, this time to MCA (Micronized Copper Azole) in both -AG .06 Above Ground and -GC .15 Ground Contact. MCA is a different solution than CCA or ACQ, as the method employs pulverizing (“micronizing”) the copper to very fine particles. Micronizing the copper allows it to penetrate the wood at a microscopic level, so the copper that gives it the green color is now “inside” the wood fiber, as opposed to “around” it (which is why MCA pressure treated lumber isn’t nearly as green in color as CCA or ACQ). It is also why the retention number is so low, at .06, due to its ability for deep penetration. Around 2016, it once again came about by discovery after some premature rot issues on both ACQ .20 and MCA .06 that consumers where buying Above Ground and using it in Ground Contact applications. As a result, the definition of “Ground Contact” by the treatment companies was amended to state that any component would be considered ground contact if it were to be installed in a difficult place to maintain, repair or replace (which includes beams, joists, ledger boards, stringers, posts and sometimes decking). This also includes components that are less than 6” above ground after final grading, or in situations with limited air flow or water drainage. As a result of this news (and understanding the risk we all were taking in selling MCA .06 Above Ground), most lumber dealers now currently stock MCA .15 Ground Contact on all of their pressure treated inventory items.

It’s a matter of perspective in how you want to compare the different versions of pressure treated we’ve had to endure over the past twenty years: although CCA .40 was exceptional in performance and didn’t require much thought in its application, it was a health-hazard. Although ACQ .20 performed well, it was too caustic to use with common metal products and created significant safety issues but, in addition to this, the proper options to choose from (ACQ .20 Above Ground or ACQ .40 Ground Contact) were not clearly conveyed to the consumer. With MCA, we can tell you it will perform well and to your expectations IF it is installed properly and the correct retention is used. Even though it’s hasn’t been widely practiced (and according to the manufacturer’s care and installation instructions), boards should have an end-coat preservative applied to cut ends and penetrations (we recommend WoodLife CopperCoat). For additional measure, we highly endorse the use of a joist tape on decks. If you’ve lived on Cape Cod for any length of time, you surely know what a damp climate it is and battling mold and mildew is a year-round sport. Water is the chief nemesis to any home, and it now requires us to pay more attention to our decks, so that water is properly shed away and that all has been done to best protect any place where standing water may penetrate or where poor airflow may occur. Please be sure to contact us should you have any questions and thank you for reading our update this month. We appreciate and thank you for your business!