Ketan Mamtora: All right. Okay. That’s all from my side. Good luck. Thank you.
Devin Stockfish: All right, thank you.
David Wold: Thanks, Ketan.
Operator: Our next question is from Mike Roxland with Truist Securities. Please proceed with your question.
Michael Roxland: Thank you, Devin, Davie, Andy for taking my questions. Very good quarter.
Devin Stockfish: Thank you.
Michael Roxland: Just on EWP, can you talk about any regional differences that you’ve seen on EWP demand? I recall the West being more impacted some months ago from sort of market conditions and inclement weather so have you seen a ramp on the West more than the South. But just help us figure out how that demand improvement has been broken up by region?
Devin Stockfish: Yes. I mean, California, in particular earlier in the year and late last year was struggling, and that was, if you recall, just a result of wave after wave of storms hitting that market. So you really saw building activity slow quite a bit. As we got deeper into spring and early summer, the California market picked up quite a bit. And you can see that mostly in the Douglas fir lumber sales that we’ve got going into that California market that really saw an uptick as that building activity increased. I’d say there are always regional differences. California, I think has been picking up. Texas is always a strong market. The South has generally been pretty strong. And I think all of those trends are holding. When you think about what’s going on with EWP, there’s obviously two pieces of that, though.
There’s the demand and how much building is going on and then there’s also the supply that’s going into each individual region. And our experience is every local market has its own competitive dynamic. And so it’s always balancing, making sure that you’re serving your customers, trying to make sure your margins feel good, but also making sure that you’re holding market share against competitors who all want the same business. So that dynamic plays out in every region, every day. But I’d say on balance, again, the EWP market certainly has stabilized. And as you can see with our order files extending out, we feel pretty good about that trajectory. I mean, there will always be some ups and downs on pricing. But directionally, we feel pretty good about where EWP is going.
Michael Roxland: Thanks for that, Devin. Just following up, I mean, it’s kind of interesting when you look at your special improvement in lumber versus EWP. Lumber about 5% sequentially in terms of volumes, but EWP up about 63% quarter-over-quarter. Can you help us frame like what’s really driving the difference? I mean, is it all due to just the fact that EWP is more single family related, maybe lumbers got the R&R component? Or is there anything else driving the difference between lumber demand and EWP demand?
Devin Stockfish: Yes. I mean when you look at our sales volumes, it’s really more of a function that we had scaled down our EWP production early in the year because of what was going on and just the dynamic with so many buyers destocking. So the big volume increase in EWP, I mean, obviously, it’s related to the fact that there’s been a pickup in homebuilding activity, but the delta between the improvements in volume in EWP and the improvements in volume in lumber is just that EWP was operating at 60% capacity for the first quarter, whereas lumber wasn’t down nearly as much. But that was an intentional decision on our part just to match supply with demand.
Michael Roxland: Got you. And one final question before turning it over. Just the operating rate in EWP in 2Q?
Devin Stockfish: Yes, it was in the mid-70s, mid or low to mid-70s. And so we think it will be up just a little bit in Q3.
Michael Roxland: All right. Thanks very much and good luck in the second half.
Devin Stockfish: All right. Thank you.
