wood prices – Brenlo

Overview : Lumber Prices

Over the last two years, we have seen a constantly changing economic dynamics and distressed markets. The disrupted equilibrium of demand and supply has impacted multiple industries. The lumber industry was visibly affected by skyrocketing prices pinning holes in customers’ pockets.

We are hoping to slowly pace back to our normalcy. However, as history suggests, deep economic crises often leave trailing scars that take time to recover.

The vacuum created between demand and supply can take another couple of months to fill. Recent headlines suggesting the drop-in prices seem to be far from reality, and here is why?

The situation is still volatile, and there are already concerns over an upcoming global economic recession.

Inflation

We are at the highest inflation point in the last three decades.

The current inflation surpasses the highest mark in recent history and is over 7.7% for Canada and 8.6% for the USA. Let’s understand what inflation can do to our economy?

HOW INFLATION EFFECTS :

The current inflation surpasses the highest mark in recent history and is over 7.7% for Canada and 8.6% for the USA. Let’s understand what inflation can do to our economy?

Transportation Costs

• As a result of the shortage, Gas charges have gone significantly up, The increased fuel prices result from inflation and multiple sanctions put on Russia for its invasion of Ukraine.

Currently, the average gas price in Canada is around $2.04/liter. It was around $1.29/liter during the same time, last year.

As a matter of fact, Gasoline Prices in Canada averaged 0.96 USD/Liter from 1992 until 2022,

• Fuel demand continues to increase as people venture outdoors to enjoy warm summer. Thus, the prices are predicted to go up because of the short gas supply.

• There are delays and backlogs with Rail, Marine, and Trucks, forcing lumber and pulp companies to slow down production and exports.

Ultimately, the whole supply chain continues to suffer.

Disbalanced Demand & Supply – After Effects

Sawmills are still unable to keep up with the demand. The industry is troubled by labor shortages. If the increasing housing start data is compared, sawmills’ output is significantly behind.

Other issues not letting the prices stabilize include, ongoing supply chain disruptions and tariffs on Canadian lumber imports.

In our earlier newsletters, we outlined essential aspects of the economic outlook and soaring prices, which you can also read here.

The ongoing media headlines suggest a reference for soft lumber pricing, which seems to stabilize temporarily, but hard lumber corrected pricing is like a distant dream.

There is still a huge shortage going for specialty hardwood species such as White Oak, Walnut Oak, American Poplar, and more.

BRENLO'S Response

We are taking a proactive approach and keeping up with the following measures to make sure our customers are happy.

• We are working hard in preparing ourselves to absorb maximum disruptions across the supply chain, allowing us to pass on only the minimal effects to our clients.
• Despite the ongoing challenges with the supply chain, we are closely working with our suppliers to retain a strong inventory position and ensure our product quality is maintained at each level.
• With our manufacturing capabilities, we are continuing to push back and work on bringing down the lead times and supporting our customers.
We would love to hear back from you.

Please leave your thoughts and comments in the comment section below.

416-749-6857
[email protected]

Overview :

White Oak is one of the most sought-after wood species across the globe. There has always been an upward trend in its demand, especially from parts of Europe. However, the domestic demand for white oak has also surged in recent years.

The following image shows the basic differences between different white-oak cuts that the market offers.

White Oak Facts:

• White oak is one of the most preferred woods in terms of adding aesthetics to living spaces. However, it is known to be ‘photosensitive’ causing it to turn yellow eventually due to the effect of ultraviolet radiations. But on the positive side, they are easy to maintain and can be kept away from yellowing by basic maintenance activities. Bleaching is an excellent way to restore stained white oak to its original form. The treatment not only produces brilliant results but also helps in adding dreamy colors and contrasts.

• Around a decade ago, the demand for its quarter cut was surpassing the demand for rift-cut but today, it is just the opposite.

• Today, Invariably the end consumer is preferring rift cut for its consistent, modern and elegant design look.

What is kiln drying and is it a current challenge for White Oak:

In simple words, Kiln drying is a process to bring down the moisture content of green lumber to make it workable. A kiln is like an oven where one can control the levels of temperature, humidity, and steam for a set period allowing it to achieve the desired moisture content.

Though we can’t consider this process a current hindrance because the methods have essentially remained the same for years. White Oak trees are known for their slow growth followed by a long kiln drying process and it has hardly made an impact in the present situation.

Nevertheless, the point that we are going to make next, may not seem to be impacting now but can be detrimental in a long run.

American white oak supplies could begin to significantly dwindle over the next decade. The worry is that, despite currently growing in over 100 million acres of forest, American white oak trees aren’t regenerating quickly enough to keep up with demand.

The good part is that the problem has been detected and the initiatives are in progress.

Key Reasons impacting White Oak :

The global pandemic has caused a massive economic decline impacting and shutting down multiple industries parallelly. Let us find out, how specifically it has affected white oak’s wood supply and the subsequent challenges faced by the end consumer.
1. Labor Shortage
2. Demand and Supply Equilibrium

1. Labor Shortage –
With the start of the coronavirus outbreak followed by subsequent lockdowns, the supply chain suffered the most. In no time, there was a labor shortage which still happens to be a big challenge in the industry.

As a result, the number of loggers became scarce in the supply chain and caused a low log supply, subsequently bringing the saw mills’ production down directly affecting the end customer.

2. Demand and Supply Equilibrium-

White Oak is constantly in demand, not only from domestic customers but also globally.

White Oak is constantly in demand, not only from domestic customers but also globally.
Besides the sawn white oak, there is also an increase in demand for its ‘logs’ and this has now become a very strong market where people are buying logs and sawing them locally.
Other than this, container shortage is a byproduct of the pandemic and has impacted the economy at multiple levels including the movement of freight across the continents.
This has resulted in reduced cashflows and liquidity making millers skeptical about sawing the species (including white oak) that can’t be easily shipped.

Lets talk about white oak PRICE :

With increasing demand, this hardwood has seen an incessant price rise over the years. However, the pandemic has resulted in a visibly abrupt price increase for many wood products, including MDF, Plywood, Poplar, and White Oak.

Today, its price is 55% higher than what it was today around the same time last year.
Its price hiked to 40%, 6 months ago and then continued to rise with the new variant (Omicron) making headlines. it may further increase in the coming months.

At Brenlo, we have always tried to obtain our white oak in ‘lots’ or large quantity orders to keep a consistent color and grade.
We aren’t purchasing small lots from multiple suppliers to avoid inconsistency.
We are staying ahead of demand and procuring flat cut, quarter cut, and rift cut to meet demand and fill orders.
At our manufacturing, we are investing in our people and technology to modernize the processes.

Don’t forget to leave your comments and feedback.

Showroom & Customer Pickup

65 Worcester Road
Toronto, ON M9W 5N7
P: 416-749-6857
F: 416-749-8969
E: [email protected]

Manufacturing

7000 Tranmere Dr
Mississauga, ON L5S 1L9
P: 905-677-9204
F: 905-677-7859
E: [email protected]

Lumber Prices 2022 : Whats’ the Reality?