Southern Pine plywood ended a historic run of flat prices on May 19. Prices for all thicknesses were unchanged for an unbroken streak of 12 weeks before shifting mildly down.
“In total, it was a flat market for nearly a whole quarter,” said one producer. “If anything, I think it’s a signal of the tight trading ranges we are in for through the end of the year.”
It certainly made some aspects of trading easier.
“Quoting was simple because buyers wanted the exact same load and the price was the same as seven weeks ago,” said a seller.
Prices of 15/32-inch 4-ply stalled the week of March 3 at $540 on the westside, $565 in the central producing region, and $575 on the eastside. Traders cited numerous factors, including well-balanced supply and demand, but a reduction in imported Brazilian plywood was most common.
In 2022, Forestwood Industries, Inc., a certifier of Brazilian plywood, had its PS 1 grade stamps nullified and its ability to certify panels revoked. After regaining certification abilities and then losing them once again, imported panel volumes dropped and opened markets in the Northeast and Florida where Brazilian imports were dominant.
“It let us move the pole to some different fishing holes and hold our levels,” said a seller.
The vacuum of certification left only two mid-sized Brazilian mills supplying PS 1 panels. Since that tumultuous period, traders say Forestwood has ceased its attempts to regain certifying credentials. Eugene, Ore.-based Benchmark International is seeking to pick up the slack.
Prior to the recent run, the longest flat market for Southern Pine plywood was in 2018. Prices for 15/32-inch panels held in stasis from November 9, 2018, until January 4, 2019. At the time, prices were $365 on the westside and $395 on the eastside.
On the buy side, customers were content to a point during the recent streak. “It’s one of those things where you get so close to the previous record, you kind of want to break it for the sake of breaking it,” said a buyer. Traders found narrow margins by adding mill surpluses to contract volumes.
Purchasing to fill needs kept customers returning on a regular basis and sustained momentum. But unrest grew more pronounced after surpassing the 2018 record. Softness bubbled up gradually over a two-week period. By early May, some producers began offering discounts to appease the impatience.
“We heard a lot of, ‘A flat market is a down market,’ by the end of it,” said a producer.