Building Materials Update for LBM Industry & WRLA Partners
May 20, 2021 By WRLA
In response to feedback from various industry partners,the Western Retail Lumber Association has prepared the following update on the current situation facing the building materials industry.
As we continue to navigate through the pandemically driven supply chain issues we continue to collect updates to keep our industry partners informed. The housing and R & R market continue to be strong putting continued pressure on production that has been working to get caught up since last spring. Coupled with the manufacturing and transportation issues, all product lines have experienced increases with more to come in many cases.
Raw material availability and accessibility, personnel issues, packaging issues, transportation and high demand for product continues to put pressure on the supply chain. Expect continued price volatility, allocation on products and longer lead times on most product lines.
The recovery on resins is not expected to take place until July. The storm damage in Texas that damaged the petrochemical plants has created significant damage and not all plants are operational. This means shortages and supply allocations are leading to strict product allocations. Resins used in the production of OSB, EWP, polyethylene, PVC, vinyl siding, vinyl windows, adhesives and paints has been greatly impacted and it will take time to recover. Plastic packaging has also been impacted in some cases creating additional delays.
Freight certainly continues to be a challenge. Rail freight often offers unpredictable delivery times and offshore logistics continue to be problematic. There is a log jam of containers, limited on-board space and port congestion creating extensive delays. This extends to raw materials such as steel, which is putting pressure on the domestic finished product for manufacturers.
Rail and trucking issues continue to add delays, lack of car availability and trucks are extending lead times and in some cases from two weeks to 12 weeks on some product lines.
In terms of lumber products, we are in uncharted territory for lumber and the demand for product continues to outpace the ability for manufacturers to supply material to meet the demand. Some products are not expected to recover until the fall and EWPs are the number one supply constraint for the Canadian construction markets and available supply will be consumed by new home construction.
One of the key questions we are asked is why so much Canadian product ends up in the US? In speaking with some lumber manufacturers, they have indicated that the focus on supplying the Canadian market has been a priority and some of which have increased their product to Canada by 40 per cent. As this is an FAQ, wanted to address it in this report.
What’s to come
- Gypsum products will continue to see increases in the coming weeks and are in tight supply. Delays can be expected.
- Insulation is experiencing raw material shortages as well from resins to glass impacting the ability for production to keep up with the demand. Transportation issues are also impacting lead times and delays will continue and price increases will continue in the coming weeks.
- Steel products have seen increases in the range of 60 per cent and there is a good chance there will be more on the way.
- Roofing products such as shingles and accessories are also in high demand and some manufacturers are in tight supply. Price increases have been experienced as a result and the lead times on accessories have gone from a 75-day lead time to five months in some cases. Plastic accessories will see an increase in the coming months as well because of the resin challenges required for manufacturing.
- Mouldings are experiencing record demands and price increases will likely continue as a result of freight issues, material shortages and price increases from a mill.
- Windows and doors are experiencing longer lead times due to the demand and price increases are expected to continue.
Communicating your material needs is always important but even more so now with the many challenges and pressures placed on all aspects of the supply chain. This perfect storm of issues has presented the inability to handle “rush orders” and unstable pricing means quotes need to be open for fluctuating market price.
Once again, we are here to help and provide as much information as possible. We hope that this information is helpful to you, please reach out with questions and suggestions.
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