The supply-demand balance situation became much more clear this month for North American solid wood operators. Also, end-users have updates on field inventories both at producers and with secondary resellers.

As the market was better able to determine how much construction framing dimension lumber is in the supply chain compared to immediate future building needs, prices on almost all commodity items dropped significantly. Where sawmill order files had been five weeks or longer one month ago, they were now — as more usual for the season — at one week.

Current Softwood Lumber Prices Compared to Recent and Historical Highs

The usual seasonal curtailments are on in Quebec, and the heat/fire ban is in effect in British Columbia’s forests. As well, as August looms, construction projects across the US and Canada will be stopped due to extreme heat.

By now buyers have applied their late-arriving wood from February orders to their respective building uses, and discover they have not much need into this seasonal slow-down time for construction and forestry operations alike.

Prices settled back down further on almost all solid wood commodity items as the severe transportation delays of well-on one year have finally been resolved.

The below table is a comparison of June 2017 and July 2018 prices for benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05:

Sawmills were motivated sellers as they found their order files down to less than one week and it not yet August.

Madison’s refers readers to the astonishing graph below which says a LOT about immediate- and near-term future demand for construction framing wood products: