Southeast Business
Southeast Business Trends Graham Sweeney Editor While prospective lumber customers continue to wait for lower interest rates before committing to new builds, lumbermen in the Southeast region noted that rates “might never return” to COVID-era numbers. A Louisiana source said, “people haven’t gotten over the fact that there were such low interest rates (during the pandemic) and that was not the norm.” He added that this “market instability” has led to his customers being “very price sensitive.” “It is hand-to-mouth. Nobody is making any big investment,” said the lumber distributor. “People are watching their dollars very closely right now.” He noted that the market for new homes slowed down in the third and fourth quarter of 2023. “People are customizing their (current) homes,” he said. “There is not a lot of speculative building going on.” A Tennessee source agreed. Continued on page 72 Ontario/Quebec Business Trends By Richard Lipman Guest Writer Interest rates continue to be on everyone’s mind as we go into 2024. “We had a very good run in the lumber markets through November," reported a Quebec producer. "We have seen a substantial price appreciation. That was a rally that lasted three to four weeks. The interesting part is that going into December, although the rally softened a little bit, prices held, which is a good sign going into the end of the year here." Noted one Ontario manufacturer, “This is a nice way to start towards 2024. One of the reasons for this good stretch is that there's better balance right now between demand and production. There's been some production cuts in both Eastern and Western Canada and that has had an impact on the availability of some commodity products. This is really helping the marketplace at this point in time." Reported a Quebec manufacturer, “What remains a staple, a leader in the market, is No. 2 and Better, 2x4-16 is very strong right up to today. It is selling nicely. We are hearing that people are selling it over print price for the 16s, you know, the Great Lakes price. People are selling several dollars over that with ease at the moment, which is unusual. Usually we do get these periods where that product is successful, but it gets caught up, there's a lot of pressure coming from offshore, for example, Euro wood often in the US that comes and spoils the rallies for Canadian and US lumber producers, but in this particular case, it seems to be holding again. It speaks to the fact that there's good supply/demand balance in the marketplace." “In general 2x4 randoms and 2x6 randoms in No. 2 are strong and, in some lengths, No. 3 is strong, and both 2x4 and 2x6. So those are the leaders," according to an Ontario wholesaler. Noted a Quebec wholesaler, “The economy grade as well, 2x4, 2x6, is strong also. We’ve seen people coming back and looking for more constantly in these products, which is a good thing. It's not a commodity, but it's good to see it moving anyway." An Ontario wholesaler commented that “looking in my crystal ball, it’s an interesting one. With interest rates potentially stabilizing, if not decreasing in time, like maybe during the first quarter of 2024, it should help the market. Everyone is going to watch carefully to see where the housing start numbers were for November when they come out. That's going to be a big teller as well as to what we're going to see in the first quarter of 2024." A Quebec wholesaler commented, “It's so difficult to predict as we have had so many things happen in the last couple of years, with interest rates and housing coming down and all of that. But, in the US there's still a large deficit of rental units, for example, Continued on page 72 Page 48 Softwood Forest Products Buyer • January/February 2024 Softwood Forest Products Buyer • January/February 2024 Page 49
