True housing construction activity finally got going across the North
American continent as the month of June closed. Many builders found
themselves short of the lumber supply they would need for existing projects.
While no one was yet building inventory, the availability of wood remained
quite tight due to ongoing sawmill curtailments and lessened production
volumes.
Customers struggled to locate the wood they needed from wholesalers and
secondary suppliers. Demand increased to the point that lumber prices once
again rose slightly. Expectations about industry is that, as lumber sales
continue to increase, more sawmills and going to ramp up production volumes
to bring more lumber manufacturing online. Into the next couple of months,
as supply improves to meet demand, lumber prices should stabilize. Then it
will start to become clear where the new price floor for lumber is; we will
start to see what is the new normal.
In the week ending July 14, the price of Western Spruce-Pine-Fir 2×4 #2&Btr
KD (RL) was US$458 mfbm, which is up by $12, or three per cent from the
previous week when it was $446. That week’s price is up by $68, or 17 per
cent from one month ago when it was $390.
Producers boosted their asking prices on most high- and standard-grade items
and received little-to-no pushback from downstream buyers.
Demand for all solid wood commodity groups once again showed palpable
strength. Players considered the upcoming Canadian and American national
holidays to be the next major market litmus test.
Strong sales of Western S-P-F persisted, according to traders in the United
States. Bread-and-butter dimension items and stud trims continued to sell
with aplomb among both primary and secondary suppliers, whittling sawmill
inventory down and cleaning out much of the more readily available material
held by distributers. Resultant sawmill order files were into the last week
of July and pushing early August. Demand for low grade was so-so compared
with #2&Btr, but holding firm.
Suppliers of Western S-P-F lumber in Western Canada reported a more measured
pace to business as the frantic nature of the previous week’s sales push
died down somewhat. The significant discrepancy between supply and demand
remained however, with the latter far outstripping the former. Availability
at the sawmill level was scanty compared to the distribution network, and
asking prices continued to rise in both camps. Sales activity came in spurts
near the end of the week as many buyers jumped in to cover their short term
needs in advance of the upcoming Canada Day holiday weekend. With July 1st
falling on a Saturday, plenty of companies were taking the Friday off
instead of the Monday, or vice versa. Sawmills confidently maintained order
files into the back half of July.
Demand for Western S-P-F studs remained on a solidly upward trajectory
according to suppliers in Western Canada. Studs producers had established
three- to four-week order files with ease over the past 10 business days,
with stud mill lists growing thinner by the day. Traders noted that overall
supply of WSPF studs was one of the categories most affected by shutdowns
and curtailments related to the ongoing wildfires in Western Canada.
Resultant asking prices continued to climb in most trims this week.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly
Averages
Compared to the same week last year, when it was US$650 mfbm, the price of
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending July 14 was
down by $192, or 30 per cent. Compared to two years ago when it was $760,
that week’s price is down by $302, or 40 per cent.
More Reports:
