The annual seasonal lumber price trend is returning to the more predictable changes historically recognized by industry players.
Producers and end-users alike are finally seeing some stability, which provides confidence and makes it easier to plan into the mid-term future. The big question on everyone’s minds, and the main driver to this ongoing attitude of caution, is “what is the new price bottom?”.
Even as prices levelled off, and the facts of markedly increased cost-of-production at sawmills are widely known, customers have remained wary of what might be the next shock. Players would rather get caught short of the lumber they need for ongoing building projects, than to stock up on wood only to see prices drop.
This has meant lumber manufacturers are keeping production volumes lower to stay in line with this soft demand, in order to prevent prices from falling below manufacturing costs.
In the week ending September 20, 2024, the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$404 mfbm. This is down -$6, or -1%, from the previous week when it was $410, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter. That week’s price is up +$22, or +6%, from one month ago when it was $382.
There was a repetitious feel to the North American lumber market this week. Stable trends were apparent in demand, supply, and commodity pricing.
KEY TAKE-AWAYS:
- Commodity prices were mostly unchanged as producers were content to cruise at current levels.
- Secondary suppliers moved good volumes amid light counteroffers from purchasers.
- Sawmill offer price lists varied considerably from producer to producer.
- Buyers mostly remained on the fence even after the news of lower interest rates and better housing starts data.
- Secondary suppliers posted much greater price variability as they continued to empty their inventories of older, lower-priced, material in preparation of inbound orders from the sawmills.
- Buyers in the US Northeast refrained from building any volume.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
