Southern Pine Softwood Lumber Prices Skyrocket, March Futures Closes Up $14

Southern Pine Softwood Lumber Prices Skyrocket, March Futures Closes Up $14

The sense of astonishment was unabated throughout the North American softwood lumber market last week, even as a brief respite in buying — due to sheer sticker-shock on the part of customers — allowed sawmills to catch up on yawning order files and to ship out wood purchased weeks ago. While long-delayed rail cars started to appear, a chronic lack of these continued to plague lumber producers.
Prices were mercurial; there is really no other way to describe it.
Southern Yellow Pine 2×4 East Side standard grade prices jumped another 2% this week (to US$615 mfbm, from US$605 mfbm last week).
On the Chicago Mercantile Exchange, after-hours trading of lumber futures for the March contract, which closed Thursday, was up $14 to $540.
May and July were quoted up-limit at near-$500 in after-hours trading.

Current Softwood Lumber Prices Compared to Recent and Historical Highs

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

Further to Madison’s conversation last week (regarding: is there a “US duty-free” price of softwood lumber for domestic Canadian customers), this week we are prompted to look into a new relationship between the price movement of standard and #3/Utility grade 2x4s of WSPF and Southern Yellow Pine 2x4s.
Traditionally the price movement of the #3/Utility and #4/Economy grades of any respective species mostly simply followed the ups-and-downs of standard grades. However, there seems to be a different trend developing.
Perhaps this is because the end-user has become more disparate.
These days, remodelling and reconstruction make up an almost equal share of dimension lumber sales as does new housing construction. As well, consumption of primary sawmill wood products for other applications entirely — specifically pallet, crating, and packaging component sales — has been improving by large amounts since 2016.
In addition, a maturing softwood export market is making more clear the disparity of supply between Canada and the US. Canada is increasing exports of higher-value remanufactured lumber products to Asia (ie: Japan), while exports of US logs have jumped sharply from 2016 to full year 2017.

The below graph is a comparison of 2016 and March 2018 prices for benchmark WSPF and SYP KD 2×4 #2&Btr prices compared to #3/Utility grade:

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

Comments are closed.