Softwood Lumber Prices Race Toward 2018 Highs as Demand Drops

Softwood Lumber Prices Race Toward 2018 Highs as Demand Drops

“Robust lumber and panel sales continued last week as supply just couldn’t keep up.” — Madison’s Lumber Reporter

Madisons Lumber Reporter Weekly Price Chart: July 2020
madisonsreport.com

While demand for construction framing dimension softwood lumber continued to surpass supply last week, it was noticeable that buyer orders to sawmills were slowing down. Indeed, customer interest seemed to shift from the benchmark Western Spruce-Pine-Fir to the East Side, as prices of Eastern Spruce-Pine-Fir increased by more than that of Western.
Demand for plywood, meanwhile, was unabated for reconstruction following social unrest about racial inequality.

Softwood Lumber Movers & Shakers: green and KD Construction Framing Dimension Lumber Prices JULY 2020
madisonsreport.com

Western S-P-F producers in the US reported another stellar week during which they wished they had more material to cover unceasing inquiry from buyers. Retailers were frustrated with late shipments but were also aware that little could be done about pandemic-caused shortages of transportation equipment and labour.
Canadian Western S-P-F producers saw business intensify last week as Canadian customers continued to swoop in and buy up every speck of wood, before any folks in the US could get to it. Without batting an eye at #2&Btr prices – which were up $22 to $46 again last week – one large producer was sold out before 8:00am, leaving the US wholesale market wanting. Sawmill order files were at least four weeks out on all dimension lumber items.

Western Spruce-Pine-FIr KD 2x4 #2&Btr prices JULY 2020
madisonsreport.com

For the week ending July 10, 2020, prices of standard construction framing dimension softwood lumber items continued sharp increases. In particular, benchmark lumber item Western S-P-F 2×4 #2&Btr KD rose further, up by +36, or +8%, to US$504 mfbm, from US$468 the previous week. The price for this lumber commodity was up +$126, or +33%, from one month ago.
Compared to the same week in 2019 this price is up +$112, or +29%.

Western Spruce-Pine-FIr KD 2x4 #2&Btr prices JULY 2020
madisonsreport.com

“Sellers of Eastern S-P-F in the US reported increasing cases of substitution; as customers desperately snatching any wood they could find regardless of species or designation.” — Madison’s Lumber Reporter

As in the West, Eastern S-P-F suppliers noted that buyers had gotten used to not worrying about asking prices and instead were focussed on the simple concept of availability. Players couldn’t think of a commodity that wasn’t rabidly sought after, and any scrap of leftover inventory held by a sawmill or wholesaler was jumped on with alacrity. Lumber producer order files pushed into the back half of August as the acute shortage of wood stirred up desperation among buyers.

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

Still making big jumps and catching up to recent-record highs of mid-2018, last week’s Western S-P-F 2×4 price improved +$119, or +31%, relative to the 1-year rolling average price of US$385 mfbm and increased +$114, or +29%, relative to the 2-year rolling average price of US$390 mfbm.

Madison's Historical Softwood Dimension Lumber Price Comparison Table JULY 2020
madisonsreport.com

The above table is a comparison of recent highs, in June 2018, and current July 2020 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of Sept 2015:

Comments are closed.