RE:RE:Why recent SP strength?It relates to:
1) Supplier disipline. E.g. shutting down the line, plus GP doing the same. LP on board with converting to siding. All in all, they are NOT overproducing any more so that is a good thing.
2) Seasonality. See below. This is where the smart money moves in.
https://www.cmegroup.com/content/dam/cmegroup/education/interactive/moore-report/pdf/AC-167_MooreLumberFinal.pdf https://business.financialpost.com/uncategorized/timing-right-for-lumber-stocks 3) Interest rates will jumpstart housing. Lower is better.
4) Pent up demand. The breakever housing starts in the US are ~1.5MM per year. We have a long way up to go.
5) Substitution from plywood. Ongoing; plywood is tough to produce and needs a big log. OSB is cheap and easy; manufacturable from anything (junk wood). It's a low cost enginereered sol'n.
6) OSB moving offshore; moving to non-residential applications. Norboard is leading the charge here.
So, it's complex and multi-facted economics, but by and large the time is right for a positive change. This has been too low, for too long due to the street looking down on cashflow monsters like Norbord and loving the feckless Unicorns like "We Work" and "UBER". That dynamic is sure chaning though.