Lumber Sales Remained Muted Into Mid-February, As It Seemed Like Many Buyers
Were Waiting On The Sidelines To See What Everyone Else Was Doing.
Inquiry at sawmills was good, however there was not yet much follow-through
with actual sales. The forest products manufacturing industry was poised for
the next home building season, but since that hadn’t quite started yet in
2024 many were taking the chance of not stocking up on lumber inventory. So
many players had been bitten by those sudden, sharp price increases of
recent years, and general macroeconomic conditions are not precisely
encouraging as the increased interest rates seem to be having the effect of
slowing home sales. Thus, while North America remains in
winter weather, most lumber buyers are taking a cautious approach and
delaying true purchases until they see an increase in construction activity.
In the week ending February 9, 2024, the price of benchmark softwood lumber
item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$442 mfbm. This is
flat compared to the previous week when it was $442. That week’s price is
down by -$3, or -1%, from one month ago when it was $445.
Different regions and product groups of the lumber market slowly woke up
this week, even as commodity prices were largely flat. Meanwhile, plywood
surged up across the board
Western S-P-F trading was a hit-and-miss affair according to purveyors
in the United States. There was a frustrating lack of flow to business but
at the end of the day, when counting up sales, volumes weren’t bad. Demand
appeared to increase as the week wore on, with suppliers having to chase
orders with less frequency from midweek-on. Customers avoided carrying
inventory however, preferring to short-cover through the distribution
network while the majority of wood remained in the hands of secondary
suppliers.
The position of many producers seemed sneaky strong, as they quietly kept
sales moving and extended order files into late-February. Meanwhile, the US
Department of Commerce, in the fifth annual review of Canadian softwood
lumber imports into the United States, has announced the preliminary
determination of a combined anti-subsidy and anti-dumping duty rate of 13.86
per cent, up from the previous determination of 8.05 per cent.
Western S-P-F lumber slingers in Canada reported a bit of a hodgepodge of
sales. Some buyers remained on the sidelines waiting for prices to slide
while a growing contingent decided it was time to jump in and buy some of
their more pressing medium-term needs. Producers maintained level asking
prices for the most part, with sawmill order files in the range of two
weeks.
Supply chain and transportation disruptions were frequent topics of
discussion; the former more top-of-mind than the latter. For now, delivery
timelines were solid as trucking and rail services have been more reliable
than usual so far this winter.
But supply has already taken several hits so far in 2024, as Tolko’s sawmill
in Williams Lake is the latest casualty. The company announced this week
that it will temporarily lay off 60 workers at that facility, reducing
operations from two 50-hour shifts per week to one.
Suppliers of Western S-P-F studs in Western Canada navigated another grind
of a week as purchasers maintained a cautious approach in covering their
needs. Stud mill asking prices hovered at or on either side of the previous
week’s numbers, with most producers reporting order files in the two-week
range. Demand was again largely confined to the distribution network as
buyers relied heavily on prompt options and quicker shipment. Smooth
transportation and reasonable delivery timelines so far in 2024 have been a
boon to that approach.
MADISON’S BENCHMARK TOP-SIX SOFTWOOD LUMBER AND PANEL PRICES: MONTHLY
AVERAGES
Compared To The Same Week Last Year, When It Was Us$476 Mfbm, The Price
Of Western Spruce-Pine-Fir 2×4 #2&Btr Kd (Rl) For The Week Ending February
9, 2024 Was Down By -$34, Or -7%. Compared To Two Years Ago When It Was
Us$1,220, That Week’S Price Is Down By -$778, Or -64%.
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