April 7, 2020

It has been hard to gather much meaningful market information, given the pandemic events that are happening right now.  Like most of you, we have been working regular hours in the office, since our industry is considered “essential” by the federal government.  We have tried to stay in contact with many of you, to get as much information as we can regarding business activity, state rulings and job site status.  For the most part, we have come to learn that the rules for building products and industrial manufacturers in each state seem to be fairly similar.  The good news is that there seems to be a light at the end of the tunnel, and COVID-19 cases might finally be “leveling out,” even in New York, where the pandemic has been the most severe; and overall, death rates in the U.S. have stayed amazingly low (only 2.9% of all cases as of this morning).  I think a special “thank you” to all of those people who are working in health care fields is appropriate.  And, I think that we all have a greater appreciation for support workers like truck drivers, who kept essential goods moving to the areas where they were needed.  The big question that we are asking is, when this is over, what next?  What are the long-term effects on the economy, especially construction?  Will jobs be delayed or cancelled?  This all remains to be seen, but the good news is that most dealers that we have spoken with are still fairly busy, and building materials are moving out of their yards.  And, as of this morning, lumber futures were heading up.

Lumber markets were in total disarray last week, with most buyers staying out of the market unless they absolutely had to buy it.  Mills were left scrambling to move loads with limited success.  Last week, we heard several sawmills announce rolling curtailments.  Yesterday, we got word that one of our suppliers, Aspen Planers, would be closing their mill indefinitely until prices improve.  2×4 #2 SPF prices fell another $30 per mbf, led lower by a free-fall in CME lumber futures prices.  2×4 MSR prices followed, and were also down by about $30.  Interestingly, 2×8 and 2×12 prices, which we had thought were near a bottom, fell another $20.  Stud prices also fell, and mills were out looking for offers on prompt loading cars.  Low grade lumber prices fared the best, holding at or near prior levels. 

Panel markets, like lumber markets, were down hard last week, and mills struggled to move their production.  4×8 7/16” OSB prices fell another $30 per msf, and order files at the mills were down to about 1 week.  Overall, 4×8 7/16” OSB prices are now down nearly $100 per msf from their highs for the year, which were seen just about 1 month ago.  Plywood prices also softened last week, but at a much smaller amount than OSB.

Steel prices remained unchanged last week, although weaker scrap steel prices led many buyers to believe that price decreases were coming.  Rebar prices, both domestic and imported, remained mostly unchanged.  Most sizes and lengths were available within a 2-week time frame from the producers.  Remesh prices softened a bit, and some manufacturers that we spoke with were offering special incentives for buyers who were willing to take full truckloads.