At a time of year when construction activity, thus lumber sales, are
usually slowing down which generally means lumber prices drop; this year the
ongoing severe supply constraints worked to pop lumber prices higher.
Customers continued to stick to the practice of just-in-time buying, since
approximately the middle of last year, so have got caught short of the wood
they need to finish projects before true winter weather comes on across
North America.
Sawmill order files stretched out into December, when normally at this time
of year they are barely a few days, or even prompt. As producers eye year
end, when they empty their lumber yards to avoid the tax implications of
carrying wood through to the next year, buyers will be feeling an ongoing
squeeze of supply.
Inventory levels throughout the supply chain remained lean, pushing many
buyers off the fence faster than they may have liked.
In the week ending November 10, 2023, the price of benchmark softwood lumber
item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$404 mfbm. This is up
by +$24, or +6%, compared to the previous week when it was $380, said weekly
forest products industry price guide newsletter Madison’s Lumber Reporter.
That week’s price is up by +$20, or +5%, from one month ago when it was
$384.
Dimension and stud prices showed some signs of firming up. Plywood
continued its upward trend.
US Western S-P-F sawmills had adjusted their shifts and production schedules
in recent weeks. That strategy appeared to bear fruit in the form of
improving commodity prices amid tighter overall supply.
Producers were done taking counter offers on items they had been looking to
move in previous weeks.Along with four- and six-inch dimension, sales of
bread-and-butter studs also gained momentum this week; with double-digit
price jumps.
With order files into late November, some mills went off the market.
Demand for Western S-P-F strengthened noticeably according to suppliers in
Western Canada. Producers were able to boost their asking prices handily on
most High Line and #2&Btr dimension items, while buyer focus was centered on
2×4 and 2×6. Meanwhile, the low grades had a much rougher go this.
Customers worked the phones to secure their needs for a four- to five-week
range, realizing that they had to act before prices got away from them any
further. Transportation remained status quo, with amenable rates as
providers continued to compete with each other for limited transit volumes.
Demand for Southern Yellow Pine experienced many parallels with the spruce
market, as the whole North American lumber market moved with the same tide.
Some items appeared to have hit a price bottom, thus firmed up to some
extent, most notably 2×6 and 2×8. With holiday breaks fast approaching,
players warned their customers that there wasn’t much time left on the clock
to take care of their short- to medium-term needs.
Transportation remained relatively smooth in the US South, with smooth
transit times and steady freight rates of late.
Compared to the same week last year, when it was us$490 mfbm, the price of
western spruce-pine-fir 2×4 #2&btr kd (rl) for the week ending november 10,
2023 was down by -$86, or -18%.
Compared to two years ago when it was us$620, that week’s price is down by
-$216, or -35%.
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