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Prices Fall for Lumber, Not Yet for Plywood or Meranti

Lumber prices began rising during the 2020 pandemic and into 2021 due to increases in demand by home renovation and hobbyists. This increased demand was coupled with the unique constraints of the pandemic as suppliers rushed to meet this surge in demand and were dealing with staffing issues caused by quarantine and coronavirus cases.

In recent headlines, we’re seeing lumber prices beginning to fall as demand and supply get back to equilibrium.

 

What does the leveling of lumber prices mean for plywood and Meranti? Don’t all wood product prices move in the same direction?

 

Plywood is made from wood, just like lumber. Plywood is an engineered wood product, manufactured from thin layers of wood veneer. Meranti is a type of plywood made from imported tropical hardwood.

 

Lumber prices and plywood/Meranti prices are not on the same trajectory.

 

Plywood supply remains highly constrained and prices continue to rise, which is a different from general lumber prices. Wholesalers are seeing a significant drop in their supply of plywood and Meranti as manufacturers struggle to provide materials to keep their production lines running. Across the plywood industry, inventory continues to suffer, causing serious imbalance in plywood supply/demand. In addition to the supply and demand balance impacting price, the transport challenges with container and breakbulk capacity continue to drive cost and unpredictable delivery schedules for imported plywood.

 

 

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