US Housing Starts & Permits Shoot Up, Canada Railway Strike Begins

US Housing Starts & Permits Shoot Up, Canada Railway Strike Begins

An unfortunate truth of life, economics, and physics is that not all things can go up at the same time. Once up, they don’t always stay there. This is a week of mixed news: US home building activity continues to improve, but in Canada forest operators are facing work-stoppage with one of the two railways.
In regards to this CN Rail strike; usually these last just a few days. However, at this time the House of Commons does not sit again until December 2 so there is no possibility of back-to-work legislation until then. In any case, it is a fact that forest products are among the last to resume service once the railway starts operating again.

Madison's Weekly Movers & Shakers Softwood Lumber and Panel Prices Chart NOV '19
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As for the good news, US home building for October jumped +3.8% the Commerce Department said Tuesday, reaching a seasonally adjusted annual rate of 1.31 million units. Starts for single-family houses were up +2%, largely due to construction in the West and South. Construction of apartment buildings rose +6.8% in October from the prior month.

Once again flat over the previous week, the price of benchmark lumber commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr remained last week at US$396 mfbm (net FOB sawmill; cash price, or “print”). Last week’s price is +$26, or +7%, more than it was one month ago. Compared to one year ago, when prices were sliding down terribly, this price is up +$42 or +12%.

The quiet tone from last week deepened as customers digested incoming loads. — Madison’s Lumber Reporter

Be ahead of these data releases … Don’t delay, this week’s softwood lumber market comment was published to the website Monday morning.

Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS

Western Spruce KD 2x4 #2&Btr prices Nov 2019
madisonsreport.com

Compared to historical trend, last week’s WSPF 2×4 #2&Btr price is again up but by a smaller amount, up +$30, or +8%, relative to the 1-year rolling average price of US$366 mfbm, and is down -$46, or -10%, relative to the 2-year rolling average price of US$442 mfbm.

Primary and secondary suppliers happily supplied hungry target markets including California, Arizona, Utah, and the mountain states, while Texas also remained a strong source of demand. — Madison’s Lumber Reporter

With sawmill order files pushing into early December on an increasing number of items, Western SPF producers in the United States were content to hold prices at the previous week’s levels. Buyers stepped back from placing new orders as they sorted out arriving volumes. Field inventories remained pretty low.
Western SPF sales in Canada were already cooling off prior to last week. The arrival of extremely cold weather in much of Canada and the US didn’t help.

Madison's Historical Softwood Dimension Lumber Price Comparison Table NOV 2019
madisonsreport.com

The above table is a comparison of recent highs, in June 2018, and current November 2019 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of Sept 2015.

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