In a previous email I talked about the challenges many of us were facing during the first quarter. Weather related issues plagued progress on jobsites and this extended to others throughout the supply chain. Those same weather related issues have carried forward into the second quarter. Fewer spring starts than anticipated had many economists reducing the estimated number of new annual home starts which corroded much of the industries’ optimism. Combine that with ample production, an
uptick in interest rates, and everyone’s guesses as to where the next constraint will come from has resulted in a flatter market than we typically see this time of year.
OSB took a slight increase since it’s low towards the beginning of April. Mills have dialed in their production but there is still prompt wood available. This indicates producers do not have the order file they expected for this time of year. We expect this market to remain somewhat stable in the near future barring any other outside influences.
Narrow dimensional lumber did not take the run up it frequently does this time of year. Instead it weakened slightly. Going forward, mid-summer pricing is often the lowest pricing of the year and then it climbs steadily into fall. We could see some more softening but there is not much downside potential. 92 5/8″ studs on the other hand have increased in price closing the gap between their normal pricing and the pricing of 104 5/8″ pricing. Mills are either limiting production on the items where they are not making a return on, or just not showing their production which is increasing the costs on 92 5/8″ studs. Meanwhile, 104 5/8″ studs have been relatively stable providing them with modest returns.
Wide dimensional has been largely mixed. 2×8’s and 2×10’s have been much more stable than 2×12’s. We would expect this trend to continue throughout the year.
Transportation has flipped from rail-related issues to truck-related issues. Mills are not reporting nearly as many shortages of cars but available trucks seem to be few and far between. Truckers are normally in high demand due to the licensing requirements but this time of year many trucking firms also switch to hauling produce where they get a better rate of return. We would expect the seasonality issues to subside slightly but licensing related issues to be ongoing.