Lumber prices and alternatives

Jody Treadway said:
I read daily reports from investors and market analysts. It's all way over my head and pay grade especially since our inventory rotates faster than the market moves.
But with that said...I think we will see dimensional lumber drop another 15% or so by July. Panels are still in high demand and you can't make them as fast as lumber. So, I predict plywood/OSB will make a small correction and lumber around 15%.
But...as we approach hurricane season, homeowner repair/update season and the "busy" time in general, the mills won't forget that customers were willing to pay whatever it cost for the last 2 years.
This is specifically why we keep our business small and offer limited specialty goods. You can lose a metric poop-ton of money on commodity items like framing lumber, OSB and subfloor when the market drops.
Click to expand...
You make it on the way up and hope that offsets the drop .

The lumber traders I deal with at Ace and Robbins are saying 20%down across the board by the end of the summer if the Hurricanes dont tear up much.

We curently have $1.3 million of lumber on the yard and most of it is already sold. This is one crazy business.
 
sammi_davis said:
The lumber traders I deal with at Ace and Robbins are saying 20%down across the board by the end of the summer if the Hurricanes dont tear up much.
Click to expand...
20pct from where? It's up 10pct this week.
 
sammi_davis said:
You make it on the way up and hope that offsets the drop .

The lumber traders I deal with at Ace and Robbins are saying 20%down across the board by the end of the summer if the Hurricanes dont tear up much.

We curently have $1.3 million of lumber on the yard and most of it is already sold. This is one crazy business.
Click to expand...
That’s the main difference between wholesale B2B and retail.
B2B sales are (typically) more knowledgeable so your margins have to sort of track the market. (With select occasional honey holes) with short inventory turns, you are always flipping inventory at a blended COG vs Replacement cost at a typically flat GP%

But these days nothing is typical
 
Needed about 20 pieces of 1/2" ZIP to finish up @jcramsey roof the other day. I hadn't priced any other than what I've seen at Lowe's, which was $80 a sheet :shaking:....called 84 and they said $47. Didn't want to waste the day to go get it so I stopped by Lowes to see if they would price match. Surprisingly, they did....still way too much for way to little.

Make OSB $6 again.!!!
 
ramjo said:
Needed about 20 pieces of 1/2" ZIP to finish up @jcramsey roof the other day. I hadn't priced any other than what I've seen at Lowe's, which was $80 a sheet :shaking:....called 84 and they said $47. Didn't want to waste the day to go get it so I stopped by Lowes to see if they would price match. Surprisingly, they did....still way too much for way to little.

Make OSB $6 again.!!!
Click to expand...
It's under $36 sheet straight wholesale. That's a fair markup for 84.
 
Ron said:
That’s the main difference between wholesale B2B and retail.
B2B sales are (typically) more knowledgeable so your margins have to sort of track the market. (With select occasional honey holes) with short inventory turns, you are always flipping inventory at a blended COG vs Replacement cost at a typically flat GP%

But these days nothing is typical
Click to expand...
Either I'm being coy (and I'm actually a shrewd business man) or I'm just plain lucky...
I wonder which it is? :huggy:
 
Jody Treadway said:
Either I'm being coy (and I'm actually a shrewd business man) or I'm just plain lucky...
I wonder which it is? :huggy:
Click to expand...
Don't hate me cause I'm beautiful
 
Lumber is continuing to drop weekly. Some forecasters say we will see around $500 per 1000 BF average by July. Plywood is also dropping. But...
I placed an order with a international plywood manufacturer yesterday. The order won't ship until next month. They said "$xxxx is this week's firm price. The market is about to correct (go up) again since huge buying groups think we are near the bottom."
Basically, we are at the point (like we have seen a few times now) where prices are low due in part to increased supply/lower demand, investors buy, available supply dwindles and prices increase again.
Right now, today, this week and next I think are good times to buy if you need commodity items (framing/sheathing/OSB) as my guess is we start to see a shift upward very quickly.
 
Its funny - when they do that with stocks its called manipulation and a federal crime.
Do it with hard tangible goods and its good business.

Stocks hurt the white collars and whole goods hurt the working man...I wonder why they care more about wall street...
 
Ron said:
Its funny - when they do that with stocks its called manipulation and a federal crime.
Do it with hard tangible goods and its good business.
Click to expand...
Who is this "they" you're referring to?

Are you saying it's bad for consumers if builders and suppliers lock in lower material prices when market opportunities present themselves?

Anybody can go try to time the market and make money. Nothing illegal about it.
 
shawn said:
Who is this "they" you're referring to?

Are you saying it's bad for consumers if builders and suppliers lock in lower material prices when market opportunities present themselves?

Anybody can go try to time the market and make money. Nothing illegal about it.
Click to expand...

Enterprise level investors buying up stock they never intend to take delivery of.
I'm not even talking about the Lowe's Home Depot large consumers speculative buying, I'm talking about specific investment capital firms buying commodity whole goods in industries they dont even participate in.

There are literal hedge funds and money managers sitting on warehouses full of copper currently. (There I know for 100% certainly - I have seen it with my eyes - 4 warehouses full in Charleston. We just installed 4 back up power systems that back up nothing but suprression systems and fire pumps.) So I suspect if there is a spread to be made in lumber people are playing there as well.

Also Im not talking about market timing...I'm talking about market maniupation (probably the most obvious and blatant example is HSBC repeated precious metal plays which have caused them to be fined heavily both domestically and in Europe yet they continue right along)
 
You're talking about two separate things. You can go trade in the futures markets right now. Anybody can. There's nothing illegal about it. If you have warehouse space, you can take delivery and store it. You can also lose your ass in a big hurry
 
shawn said:
You're talking about two separate things. You can go trade in the futures markets right now. Anybody can. There's nothing illegal about it. If you have warehouse space, you can take delivery and store it. You can also lose your ass in a big hurry
Click to expand...
Cool.

No, I'm not talking about two different things.
If you are too blind to see it or being intentional obtuse because it fits your preferred teams playbook - I can't help that.

Yes I can trade in futures, but I cant trade in the future for the sole intent to alter the price. That's illegal and the SEC has repeatedly maintained and enforced that.
It's why the eventual SCotUS case on the Gamestop STONK fiasco will be fascinating to watch.

What is happening here isn't speculative buying. Its intentional hoarding to drive scarcity...by enterprise or institutional level financial players who also hold large stock positions in companies who's profitability they have a vested stake in inflating.

It's a new and rapidly evolving world, dude. History is damn near irrelevanmt as we have never been here before. Listen now and hear me later.

Set a reminder for 5 years - let's revisit. Loser buys winner a beer and we shit talk each other over it.
 
What did they pay for their copper? /hg has been range bound for a year. I hope they're not paying too much for storage space.

You can't trade futures on an equity. Again, you're conflating things that aren't actually the same.
 
I'm well aware I'll never change your mind on a topic. It's all good. The Serenity Prayer there comforts me as I age. I don't need to win.

You are far more read and learn-ed than I...and I say that with 100% sincerity. Im not a complex thinker on macros. Im a precise and proven thinker and executor on my specific micros. I frankly dont concern myself much with the macro beyond how it will impact my little space. I am at total peace being ignorant to the larger market that I cant alter nor effectively harness.

On the copper line, you work in the same industries I do on the daily. Ignore what the numbers and the indexes tell you and ask any EC on any project you work on what their copper prices have done over the past 12-15 months. I'm not assigning causation I'm merely observing existence.

Speaking just for me I ordered $1.2MM last week of wire just for warehousing. Partially because I need my supply line to be constant, partially because I need to offset some profits prior to 7/1 and partially because I wont be able to buy it at this level again in 6 months. Im a tiny player. Yes some large players are speculating on very large scales.

I know I know "anecdote isnt the singular of data"...but sometimes the data isnt reflective of the comprehensive market. (In this instance its similar to the fact that stumpage prices hasnt increased for timber, yet lumber prices have grown exponentially)

Even if the raws are steady; the commodities they end state at aren't.
Why aren't Jody's aforementioned investors buying acreage and instead buying lumber?
 
Ya'll say when and I'll buy it.

Screenshot 2022-06-14 110919.jpg
 
shawn said:
Don't be a dick for a tick.

Sold FDX this morning and bought BHP and TECK, so don't listen to me.
Click to expand...
If I got a tick for every time I've been accused of being a dick I'd pick you up in my helicopter.

If I was one to check the financial news (I don't, charts tell all) I'd had short FDX too. But that would assume people think logically.
 
Will Carter said:
If I got a tick for every time I've been accused of being a dick I'd pick you up in my helicopter.

If I was one to check the financial news (I don't, charts tell all) I'd had short FDX too. But that would assume people think logically.
Click to expand...
I had this week's 230s. I would have held if I had more time and/or liquidity, but took the cash.
 
Back
Top