The Softwood Forest Products Buyer - September/October 2022

Quebec/Ontario Business Trends
By Richard Lipman
Guest Writer
In SPF, a Quebec producer noted, “We were off for
a few weeks and we just came back, to adverse market
conditions. It is a bit easier for smaller mills to navigate.
We sold everything before the shutdown. Like other
mills, we built an order file and now we are facing prices
that are $100 less than before the shutdown. Our market’s
lower prices were driven by the West Coast. The east was in better shape
before the Quebec holiday; there was some optimism left in eastern Canada at
the end of July."
Noted an Ontario wholesaler, “Western Canada chased the market down. Futures
reacted accordingly by being as much as $100 lower. The September contract
was suggesting a $100 drop in addition to the $100 drop we experienced.
But, lumber futures are volatile so the $100 became $60 in one day. There was a
swing of $40 in one day, which is not that unusual."
“Some very noticeable market fluctuations are becoming regular business
now," in the opinion of a Quebec manufacturer. "Back in the day, a swing of $30
in one week was dramatic and that is no longer the case. The crazy conditions of
the last two years were like a roller coaster ride. The 'new normal', if I can say
that, will still be highly volatile compared to what we experienced in the past,
where minimum volatility was about $130-140, and highly volatile years were
$200. Now, in my opinion, we are likely looking at $500 between the highs and
the lows in a given year. Still, that is well below the $1,500, which we were just
living in for the last two years. My expectation for the next year and a half is
$500 spread between the highs and the lows."
Noted a Quebec wholesaler, “I don’t see us going down more than $150 from
where we are now, which will be the low point in this current period. I see the
potential for things to go up from there by $200 to $300 in my estimation. This
should allow for more reasonable profits for companies. For the months ahead,
we will be at the lower end of the pricing, as the housing market needs to adapt
and adjust to the new financing situation. I predict we are going to have a decent
August and then we are going to prepare for a difficult six months."
“The commodities currently are selling better right now," according to an Ontario
producer. "The industrial product is already harder to sell, the No. 3 and No.
4, especially on the whites. The U.S. duty is kind of an all or nothing situation.
In some market conditions you cannot pass any of it to anyone, you can’t dictate
anything at all. When the market was strong you could show what the U.S. was
paying, and encourage your Canadian customers to pay more. The duty gives us
access to the U.S. market, but you can’t say we are able to bump up the Canadian
prices because of it."
On the Pine side, an Ontario producer commented, “The summer is slowly
coming to an end and it will be gone before we know it. Being that we are in the
summer doldrums right now, things have quieted down a little bit over the past
month or so. I think it is still going to look ok for the fall, prices are still fairly
firm, so there are no real issues there."
Particularly in the last couple weeks, according to an Ontario wholesaler, “The
market has slowed down noticeably, but it generally does this time of year. There
is still no significant amount of product out there and inventories are very low."
An Ontario producer commented, “There is a shortage in the pattern work,
siding and panelling, as it is in high demand. It is the thicker product and it takes
a long time to dry. When you get in to the 6/4 and 8/4 material, some mills don’t
want to kiln-dry it because of the time it takes and there are sometimes wet
pocket issues to contend with. It is far better as an air-dried product. With this
selling well, those inventories have gone down at the mills, and will need to be
replenished now. I don’t see there being any excess of product out there any time
soon on the White Pine."
A Quebec producer noted, “At this point, I would say that things look good for
the fall. There seems to be some demand there. There is no doubt that the interest
rate increases will likely curtail some of the business. Those on a tighter budget
may well think about holding off on some of their projects for another year until
things settle down, but people with money will still spend, so there will be activity.
I would say everybody is trying to put one foot in front of the other and hope
that things hang on for a while yet."
An Ontario-based wholesaler commented that trucking is always an issue and
it really has been for the last couple of years. Even though rates have come off a
little bit, with fuel prices being what they are, the transporters are charging for it.
Reported a Quebec producer, “The high costs all roll down to the consumer,
who have to first pay the prices of the wood itself. With the cost of the resource
going up so much, the mills are trying to pass the costs on, but then you have the
freight people charging high as well. The mills sometime feel like we get credit
for all the increase in prices."
Quebec/Ontario Trends
A Quebec wholesaler indicated, "The logging has not started up again and that
it usually is late August or early September before they go back in the woods.
There is always a little bit of work that gets done during the summer months, but
if there is any hint of drought, they don’t do any logging at all; they shut it down.
The fire season has been relatively quiet so far. It has not been one of the bad
years so far, even though it has been quite dry in the last month or so. The recent
rain will really help." •
NELMA — Continued from page 5
show them what to expect with their SPFs or EWP purchases.
If you’re selling internationally, both videos are available in French, Chinese, and
Spanish.
Let’s look at a real-world example:
Pretend one of your favorite customers orders a unit of SPFs lumber; not understanding
fully what the various grading terms and quality mean, then order No.
2. Upon opening the unit, they’re suddenly unhappy with “unexpected” knots
– so they call you back and say they aren’t happy. If you had sent them to the
Video Grades of SPFs lumber video, they would already be equipped with the
information needed to understand their purchase. Information that’s been shared
in the past on sheets that often go unread is now being presented in a way that’s
eye-catching and educational. The result? Happier retailers and happier, more
educated customers.
And with multiple translations of the video at your fingertips, end-users across
your selling spectrum can better understand the products manufactured by NEL-
MA members.
But think beyond just your customers to additional audiences: Retailers can refer
to the video to educate their customers, but NELMA members can also direct
customers from around the world to watch it and obtain a better, deeper understanding
of what SPFs grades are and what they look like.
“Our members have asked for this for years, and we’re so thrilled to deliver it
for them,” concluded Easterling. “The Eastern White Pine videos and the SPFs
videos help to complete the knowledge cycle and ensure that customers know
what to expect when their lumber delivery arrives.”
You may find the two free grade species videos on the NELMA YouTube channel.
For more information about selling SPFs or Eastern White Pine, please
visit www.NELMA.org.
WHO’S WHO - Plucknett Continued from page 2
tion and support teams focus on minimizing the disruptions of upgrading to new
software. In short, they aim to make the transition as seamless as possible. Starting
with a new customer site visit, the team creates a roadmap to identify where
and how their software can support and improve a customer’s business processes.
They then create a training plan and start regular check-ins to help keep upgrades
on track. When a business goes live on Agility, team members are on site for a
few days. After that, the support team is always just a phone call away.
DMSi is a member of the North American Wholesale Lumber Association,
National Lumber and Building Material Dealers Association and the National
Hardwood Lumber Association.
A graduate of Ogallala High School, Plucknett went on to graduate from the
University of Nebraska in Omaha, NE, with a double major in Computer Science
and Management of Information Systems.
Plucknett has been married to Annette for the past 16 years and they have one
son and one daughter. In his free time, he enjoys supporting his kids’ activities by
coaching softball and being involved with Boy Scouts. n
Learn more about DMSi Software at www.dmsi.com.
WHO’S WHO - Satterfield Continued from page 2
Association, and Northeastern Lumber Manufacturers Association.
Satterfield has been with Cersosimo over 17 years and has been in his current
position for eight years. Cersosimo was his first introduction into the industry.
Satterfield attended Wayzata High School, located in Plymouth, MN. He
obtained his degree at The University of Oregon in Eugene, OR, majoring in
Environmental Studies and a minor in Geology.
He has two sons and in his spare time, Satterfield enjoys sports, music, and
spending time with his family. n
For more information visit www.cersosimolumber.com.
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