Building materials update for LBM industry & WRLA partners
April 23, 2021
April 23, 2021
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. The economy relies heavily on the construction industry as a whole and our collective members rely on each other to keep building our communities and moving our economy forward.
The supply chain issues as of late are like no other we have experienced in the past. In our global economy, we rely heavily on raw materials and the processing of those raw materials from our international partners. This requires efficient transportation of those goods across great distances to keep product flowing through the supply chain.
We are faced with challenges in each aspect of the supply chain, many of which are created by the pandemic,but mother nature has amplified the situation.Between hurricane season on the Gulf Coast last fall, the freeze in Texas and of course past issues such as the mountain pine beetle and forest fires, readily available raw materials have been removed from production creating processing delays, long lead times and higher prices during a time of unprecedented demand.
We are here to help! If there are specific issues or product lines you would like to see regular updates on, or if you have questions please reach out to me directly.
Overview of Key Current Issues:
The strong housing and R&R market we are experiencing has placed a high demand on all building materials and the industry continues to be caught in a cycle of catch up as demand continues to outpace supply as it has for the past 12 months.
Mills and manufacturers have been struggling with surges in demand all while juggling closures, labour shortages, raw material shortages and transportation issues. While lumber was the key building material facing issues in 2020, price increases and delays have extended to other product lines resulting from raw material shortages, increased transportation costs and continued labour shortages as a result of the pandemic. Raw material harvesting and processing such as resins are impacted by weather in their respective locations,which we have experienced as a result of the hurricanes along the Gulf Coast and sub-zero temperatures in Texas. 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.
Transportation continues to be a concern. Containers from overseas are on a backlog and ocean freightlines are struggling to keep up. We have heard reports that premiums are being paid to expedite departure from the port, however there are no guarantees that the premium will result in prioritization. This impacts production! The lack of container space creates a build up of finished goods at manufacturing sites forcing production halts,due to lack of onsite storage space.
It has also been reported that all available seaworthy vessels are in rotation. Building new vessels takes three years and shipping lines will not invest in new vessels to boost capacity as this surge in demand is temporary.
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.
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 of up to 120 days have been noted.
Drywall demand continues to outpace supply and trucking issues are extending lead times here as well.
Steel products have seen increases in the range of 50 per cent and there is a good chance there will be more on the way. All steel manufacturing plants are open and producing steel. AMD is the only supplier in Canada,and they also supply the automotive and appliances sectors. A shortage in global zinc supply in 2020 created shortages in product as zinc is the main component used to make galvalume and galvanized coatings for raw coils.Supply from offshore suppliers is also very limited at this time.
Roofing products such as shingles and accessories are also in high demand and tight supply. Lead times on accessories have gone from a 75-daylead time to five months in some cases. We hope that this information is helpful to you. Please reach out with questions and suggestions. We also encourage you to communicate your material needs with your dealers to help minimize delays as much as possible.
Thank you for your patience during this unique time.