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After one of the longest downturns ever recorded in western fir sheathing prices, momentum has swung in recent weeks as CD grade prices firmed and then moved moderately higher.
The price of 1/2-inch 4-ply CD, the yardstick for western plywood, either declined or held over a period of 23 straight weeks, spanning from early August to mid-January. While the downward trend bridged a historically long period, it fell short of a decline back in 2008, which lasted 28 weeks.
During the long, slow collapse, the price of 1/2-inch 4-ply CD went from $705 to $460, an average decrease of about $11 per week. It is a modest amount when considering price moves in 2021 and early 2022 often ranged from $50 to over $100 weekly.
The low point of $460 in the latest cycle was the lowest price recorded since it bottomed at $455 to end the sharp decline from record high prices in 2021. This begged the question to traders: Are the new benchmark lows for 1/2-inch 4-ply CD now in the mid-$400s?
When comparing the most recent floor prices to those of the past, the difference is stark. Even the average weekly price for 1/2-inch 4-ply CD from 2010 through 2020, at $408, was well below the most depressed prices of $455 and $460 established more recently. Since the recent bounce in prices, traders are wondering how high prices will go given the current economic climate. By February 10, the price of 1/2-inch 4-ply had risen to $520.
The uptick in lumber sales, due to future reductions in supply, has garnered a lot of credit for the recent reversal in plywood prices. Traders note that when lumber is purchased, buyers often look to fill in their other inventories – such as plywood.
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