Demand and activity were not as robust in the eastern spruce lumber market yesterday. Orders were not as plentiful, but the ones transacted benefitted the mills and the reloads with higher prices attained. The eastern mills had more product available in the market, but prices varied among them. 2x6 continues to be a hot issue with little available and shipments a solid two weeks from the mills. Buyers had to do their due diligence to filter out the more efficient offerings. The higher prices in the market sought common ground on what levels to trade at.
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In this week’s Pakira Poll we see some consensus forming around the belief that most of the wood is at the mills. If most of the wood is at the mills, then would this support higher or lower prices?
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lower prices
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Thanks Bill, that might seem like an obvious answer. But I find it interesting how the group holding all the product, does not also hold the power behind its pricing. I’d love to breakdown the dynamics here.
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there is not as much wood at the eastern mills as perceived due to production cutbacks and log supply issues. there is a fair amount of wood in distributor’s reloads and they are more likely to be to comtrol their pricing knowing that replacement is much higher,
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A misperception of production cutback would explain it. As seen below, 55% of folks in the industry believe mills have the highest lumber inventory levels.
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