Disinterested buyers and softening demand sent most dimension lumber and some panel products’ prices down slightly last week.
The weak Canadian dollar brought motivated construction framing lumber sellers from Canada into US markets.
Volumes sold were stable, if slightly down, over the end of last year.
Canadian softwood lumber production, sales, and export VOLUMES January to October 2014 mostly flat compared to previous year.
Canadian softwood lumber exports to US for January to November 2014 by VALUE up 22% over last year.
Canadian softwood lumber exports to the world for January to November 2014 by VALUE up 13.2% from 2013; volumes up 10%.
Capacity at US mills January to October 2014 up 4% over the previous year, to 84%; Canadian sawmill capacity first ten months 2014 flat at 79%, compared to the previous year.
Newer, high-volume sawmills are made to run at close to full capacity, so there is a lot of room across North America to grow lumber production. Producers and customers have tested each other; there was general agreement in 3Q 2014 that a price floor had been reached on most dimension lumber and panel commodities.
EXPECTATIONS ARE: for more of the same this year.
US south (Southern Yellow Pine) lumber producers will continue to serve growing domestic US home building demand.
US Pacific Northwest and Canadian western sawmills will target increasing US demand to improve sales volumes while keeping the portion of lumber going to China at least stable.
Eastern Canadian lumber manufacturers are prepared to increase volumes to busy ports and reloads at the Great Lakes/St. Lawrence zone.
Barring a major event, most solid wood commodity prices are expected to maintain stability achieved through the second half of 2014. Volatility wrought, for so many years, from the epic collapse of US home building has worked itself out as the remaining players are set to move forward into continued recovery.
Prices of North American dimension framing lumber and panel products will fluctuate less than in recent years as the 2015 US home building season commences.
Usually the bigger players make their seasonal purchases through February.
LUMBER PRICES TEN-YEAR GRAPHS
The below graph shows trends for cash price of benchmark North American lumber product, Western Spruce-Pine-Fir KD 2×4 #2&Btr against #3/utility (US$ per thousand board feet net FOB mill), which helps show the impact of both drastic drops in US demand and sharp increases of British Columbia exports to China (although at much lower volumes than to US):
Also interesting is the relationship between benchmark North American lumber product, Western Spruce-Pine-Fir KD 2×4 #2&Btr and it’s counterpart, Southern Yellow Pine KD 2×4 #2&Btr east side (US$ per thousand board feet net FOB mill), which gives an interesting glimpse of the future now that the largest-volume/lowest-cost producers (Canfor, Interfor, West Fraser Timber) have bought significant capacity in US Southern Yellow Pine lumber production:
just for fun Eastern Spruce-Pine-Fir KD 2×4 #2&Btr prices are added to the above chart, to provide moderation of the more volatile Western Spruce-Pine-Fir and Southern Yellow Pine commodity prices:
January 20, 2015
Madison’s Lumber Reporter
Madison’s Forest Pulse
Madison’s Canadian Sawmill Directory