Lack of interest in US decking leads to a surplus of tongue and groove
We look at the consequences of the decking market’s failure to fully recover
As last summer came and went, the Western Red Cedar decking market never got fully up to speed. Instead of the typical seasonal gains in pricing, the opposite happened.
Falling prices and a buildup of widths like kiln-dried 2x6 decking meant the returns were far more lucrative if the 2x6 could be resawn into 1x6 tongue and groove (T&G) siding. Once that started to happen, the supply of 1x6 T&G exploded.
Since Random Lengths started publishing prices for Cedar 1x6 T&G and 2x6 AK dry decking in April 2010, T&G traditionally held a $100-200 premium over the decking. The gap started to expand in 2017, and reached $285 for much of 2019. The gap briefly shrank in the spring of 2021, but soon swelled to record levels.
By late July 2021, the gap surpassed $1,000 before peaking at $1,495 last June. Given the lofty returns for T&G and the lack of interest in decking, producers that could cut both focused on the former.
“Mills were sitting on 2x6 decking inventory for months, and either sent it to secondaries who ripped it to 1x6, or they did it themselves,” one producer said. “Suddenly everyone had T&G. People had so much T&G, they had to do stupid things to get their inventory levels down.”
As a result, the price gap has closed considerably since late June. It went back under $1,000 at the start of September, got down to $375 in mid-November, and has hovered around $500 since mid-December (chart).
Although the price spread between 2x6 decking and 1x6 T&G is high by historical standards, traders point out that demand for 2x6 decking has remained lower than normal throughout that time. In addition, the surplus T&G has dissipated, hence the growing gap. “If decking got better, that would help the T&G,” one trader said.
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