Western Spruce-Pine-Fir 2×4 Dimension Lumber Price 2015: Steep Drops

Western Spruce-Pine-Fir 2×4 Dimension Lumber Price 2015: Steep Drops

In a potentially alarming development, benchmark Western Spruce-Pine-Fir KD 2×4 #2&Btr construction framing dimension lumber prices have dropped much farther than similar commodities in the past year.

Eastern Spruce-Pine-Fir KD 2×4 #2&Btr prices fell 16.5 per cent since April 2014, from US$437 mfbm to US$365 mfbm this week (net FOB mill).

By comparison, Southern Yellow Pine KD 2×4 #2&Btr East Side prices dropped 4.2 per cent in the same time frame, from US428 mfbm at this time last year to US$410 mfbm this week.

With the largest volumes sold, WSPF price trends generally lead the market. However, the disconnect in price movement between this and the two similar species this year could be cause for concern. Not in the least because the last time there was such a difference was in mid-2005; at the tail-end of major over-building of US homes and in advance of a serious crash in construction framing dimension lumber prices and general economic woes in the US.

Western Spruce-Pine-Fir KD 2×4 #2&Btr prices have fallen an astonishing 22.8 per cent since this time last year, from US$342 mfbm in April 2014 to US$264 this week.

Madison’s Lumber Reporter

Given that these three products, WSPF, ESPF and SYP, are basically interchangeable in terms of end-user and application, such a great difference in price movement of one compared to the other two is definitely worth watching. All three products sell into Canada and the US for home building, renovation, and remodelling. Canadian demand is essentially 10 per cent of total US volumes. As well, WSPF has the additional play of selling 15 per cent of total Canadian softwood lumber production volume into new markets in Asia, particularly China.

Canadian and US softwood lumber production and export volumes remained very stable in 2014 compared to the previous year, according to the latest data from Statistics Canada, Industry Canada, the US Census, and the USDA.

SOURCE: Madison's Lumber Reporter www.madisonsreport.com
SOURCE: Madison’s Lumber Reporter www.madisonsreport.com

Check back with Madison’s often for the latest updates in this important leading indicator of general macro-economic conditions!

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