Prices of many North American softwood lumber and panel prices corrected sharply this week as customers picked through sawmill offer lists looking for construction framing wood products they could get for a lower price.
Home sales and construction in the US continue much stronger than anyone had expected one year ago.
The below table is a comparison of June 2017 and June 2018 prices for benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05:
Current Softwood Lumber Prices Compared to Recent and Historical Highs
Standard items sold little as suppliers were able to hold firm on pricing, but a wide array of specialty items and sizes adjusted prices sharply as customers purchased enough quantities of these for sellers to actually set a firm price.
Not to say that standard items languished, but sawmill order files have shrunk to two weeks, which is still quite robust for this time of year.
Futures continued to make no sense, surprising no one.
The dual Canada Day / 4th of July long weekends usually signals the regular annual sawmill slowdown. As the temperatures rise, Quebec will go into it’s two-week curtailment and maintenance time. If there are forest fires in British Columbia there will be unexpected closures at sawmill and forest operations alike.
The very strong US real estate and home building of so far this year suggests that September, usually a quiet time for lumber, might bring a renewed surge in demand for finalizing construction projects in the US.