Continued strong demand combined with restricted supply pushed prices yet higher, so in the week ending January 14, 2022 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) rose by +$70 or +6% to US$1,170 mfbm, from $1,100 the previous week, said forest products industry price guide newsletter Madison’s Lumber Reporter. That week’s price is up by +$367, or +46%, from one month ago when it was $803.
Mid-January 2022 Softwood Lumber Prices Rise Further
Unusual for the time of year but a surprise to no one, lumber prices rose further in the second week of January. Ongoing momentum of strong demand from the end of 2021 combined with significant supply constraints, most notably from the northwest especially British Columbia, served to keep prices high.
Transportation issues throughout the supply chain caused a feeling of panic among buyers, as the usual 6-week delivery time turned into 2-months or longer. Frustration reigned with customers as the location of wood previously ordered was unknown.
An upward bump in US housing starts, again unusual for the time of year, kept the pressure on for customers to order dimension lumber building materials they knew they would need for the looming spring construction season.
Check back with the Madison’s website www.madisonsreport.com often for the latest softwood lumber prices and market updates.
Continued strong demand combined with restricted supply pushed prices yet higher, so in the week ending January 14, 2022 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) rose by +$70 or +6% to US$1,170 mfbm, from $1,100 the previous week, said forest products industry price guide newsletter Madison’s Lumber Reporter. That week’s price is up by +$367, or +46%, from one month ago when it was $803.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
A strong undercurrent of demand persisted for Western S-P-F studs this week. Buyers had trouble finding prompt wood from producers, often turning to wholesalers and distributors and paying a premium for quicker shipment.
Prices on virtually every solid wood commodity continued to rise; logistical concerns dominated the conversation.
— Madison’s Lumber Reporter
Repeated forays into the market by large retailers fuelled strong demand for Western S-P-F in the US. Hand-to-mouth buying was apparent among all customers as no one wanted to take long positions after getting burned last year. Prices were up in everything but the lowest of low grades. Shipping times left a lot to be desired thanks to persistent weather and personnel problems at all levels of the transportation sector. Sawmill order files were into the last week of January or the first week of February.
Following a somewhat disjointed week to start the year, demand was unabated according to Western S-P-F sawmills in Canada. Customers clung to their cautious approaches, but overall necessity-buying was more than sufficient to clean up what limited material was available from both primary and secondary suppliers. The most pressing concerns continued to be in transportation, as the lion’s share of shipments coming out of Southern BC remained well behind schedule thanks to catastrophic flooding and severe winter weather in November and December 2021, respectively.
Western Canadian suppliers continued to fight with weather, logistics, and COVID-related personnel shortages as they tried to get their product to market.
— Madison’s Lumber Reporter
Compared to the same week last year, when it was US$944 mfbm, for the week ending January 14, 2022 the price of Western S-P-F 2×4 #2&Btr KD (RL) was up by +$220 or +24%.
Compared to two years’ ago when it was $402, that week’s price was up by +$768, or +191%.
US Housing Starts December 2021 and Softwood Lumber Prices January 2022
Transportation issues throughout the supply chain caused a feeling of panic among softwood lumber buyers, as the usual 6-week delivery time turned into 2-months or longer. Frustration reigned with customers as the location of wood previously ordered was unknown.
This problem with deliveries is due to a series of very powerful storms and massive flooding through November, which completely destroyed all four highways and both rail lines in southern BC. For details on the damage please go here: https://madisonsreport.com/2021/12/01/more-floods-british-columbia-nov-2021/
An upward bump in US housing starts, again unusual for the season, kept the pressure on for customers to order the dimension lumber building materials they knew they would need for the looming spring construction season.
New home building in the US for December 2021 exceeded the historical trend for the time of year. Indeed, total housing starts in the US increased by +1.4% from November 2021, to a seasonally adjusted annual rate of 1.702 million units. This is an +2.5% improvement from the same month one year ago, when it was 1.661 million. Meanwhile, December permits for future homebuilding rose to 1.873 units, a whopping +9.1% gain from the previous month, when it was 1.717 million. December 2021 permits are up +6.7% compared to one year ago, when it was 1.106 million.
The backlog of houses authorized for construction but not yet started shot up +1.1% to a rate of 270,000 units last month, the highest on record.
November starts of single-family housing, the largest share of the market and construction method which uses the most wood, was 1.172 million annualized, a drop of -2.3% compared to November, when it was 1.199 million. Building permits are generally submitted two months before the home building is begun, so it’s quite unusual for this metric to be rising in December. Normally, not many builders want to break ground on a new house in February. Last year was different; December 2021 single-family permits grew by +8.5% compared to one year ago, when it was 1.128 million units.
Shrewd investors know that construction framing softwood lumber prices are a good leading indicator for US housing activity, including home building and home sales. Don’t miss out, get lumber price data updates directly to your desktop every Friday morning.
US Housing 1-Unit Starts & Permits December 2021 and Benchmark Softwood Lumber Prices January 2022
Looking at lumber prices, momentum from strong demand at the end of 2021 pushed prices higher, so in the week ending January 14, 2022 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) continued rising; up by +$70 or +6% to US$1,170 mfbm, from $1,100 the previous week, said forest products industry price guide newsletter Madison’s Lumber Reporter.. That week’s price is up by +$367, or +46%, from one month ago when it was $803. That week’s price was up by +$226, or +24%, from one month ago when it was $944.
Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir Price: January 2022
A closer look at the housing data shows that availability of lots is hampering the speed of new construction coming on. The number of single-family homes on which builders started construction in December actually dropped by roughly -2% on a monthly basis. Put another way, the number of housing units that construction companies haven’t started work on despite having the authorization to begin building is up +44% from a year ago and is rising on a monthly basis. For each single-family unit completed in December there were 9.5 single-family units still under construction. This is the highest ratio in the life of the data.
As of December, there were 769,000 single-family homes under construction, a +26% gain from a year ago, and there were 750,000 multifamily units under construction, a 15% increase from December 2020.
STAY AHEAD of US housing price data by getting access to softwood lumber prices. Released every Friday for that week, since 1952 Madison’s Lumber Prices is used by the forest products industry as a price guide for North American construction framing dimension softwood lumber. These are, of course, the inputs into US and Canadian home building materials.
* Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS
When compared to the same week one year ago, of $944, the price of Western S-P-F 2×4 for the week of January 14, 2022 was up by +$226, or +24%. Compared to two years’ ago when it was $402, that week’s price was up by +$768, or +191%.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Historical Perspective
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Softwood Lumber Prices Pop Up to Begin 2022
Continuing significant lumber sales volumes and ongoing constraints with supply, particularly in transportation, served to drive most construction framing dimension softwood lumber prices higher in the first week of 2022.
It seemed like building activity has not taken a breather for the past year and a half, as housing starts in the US and Canada keep driving up. Homes sales as well, indicating ongoing future demand for lumber — certainly for the next several months at a minimum.
Momentum from strong demand at the end of 2021 pushed prices higher, so in the week ending January 7, 2022 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) continued rising; up by +$150 or +16% to US$1,100 mfbm, from $950 the previous week, said forest products industry price guide newsletter Madison’s Lumber Reporter. That week’s price is up by +$297, or +37%, from one month ago when it was $803.
Supply chain issues continued to dominate conversations across the lumber market. If it wasn’t customers complaining about delayed shipments from weeks ago it was shippers complaining about lack of drivers and equipment.
As 2022 kicked off, cautious buyers and muted demand did little to slow down soaring commodity prices.
— Madison’s Lumber Reporter
Demand was quiet to start 2022 as most Western S-P-F buyers in the US had purchased the bulk of their January-needs by the end of December. Players noted that sawmills were slow to return from the holiday break, making it harder to source material when needed.
Immense snowfalls in recent weeks across the Western United States didn’t help logistical issues. While producers were frustrated with the problems in log procurement and shipping, they remained in strong positions. Prices were up, and order files were into late-January and pushing.
Canadian Western S-P-F customers carried over their cautious buying strategies from late-2021 into early-2022. Demand was muted, but availability from the sawmills was so scanty that necessity-buys were more than sufficient to gobble up overall supply.
Adding to production-affecting holiday shutdowns was a spate of severe winter weather that lashed the Pacific Northwest, causing all sorts of issues for harvesting, hauling, and transportation. On top of that, reaction to the spread of Omicron has created personnel shortages up and down the supply chain. Mills remained in strong positions pricewise and pushed their order files into mid- or late-January.
Southern Yellow Pine sawmill price lists were sparse to start the New Year. All Southern Yellow Pine items were hard to source that week, with MSR and low grade especially scant.
— Madison’s Lumber Reporter
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
Compared to the same week last year, when it was US$944 mfbm, for the week ending January 7, 2022 the price of Western S-P-F 2×4 #2&Btr KD (RL) was up by +$156 or +37%.
Compared to two years’ ago when it was $402, that week’s price was up by +$698, or +174%.
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North America Softwood Lumber Production, Sawmill Capacity Utilization, WWPA: October 2021
Following on the heels of the previous month, for January to October 2021 softwood lumber production volumes across North America were close to the levels of the same time in 2020.
Sawmill capacity utilization rates in the United States were relatively stable while those in Canada continued the incremental improvements of most of the year.
For the first ten months of 2021 softwood lumber production in the US improved by +1.6% from the same time last year, says the latest issue of the Western Wood Products Association’s monthly Lumber Track. US lumber production volumes were 31,334 mmfbm compared to January to October of 2020 when it was 30,850 mmfbm.
Looking at the month of October against September 2021: US softwood lumber production was 3,100 mmfbm in October 2021 compared to 3,086 mmfbm in August, and a -5.7% drop compared to October 2020.
Last month’s update here: https://madisonsreport.com/2021/12/13/north-america-softwood-lumber-production-sawmill-capacity-utilization-wwpa-september-2021/
Meanwhile in Canada, for January to October 2021 production volumes came closer to matching the previous year. Canada sawmill manufacturing was up +4.5%, to 20,055 mmfbm, compared to the first ten months of 2020 when it was 19,184 mmfbm.
Specifically in British Columbia — which accounts for 50% of Canadian lumber manufacturing and sales — sawmill production volumes for January to October 2021 grew by +7%, to 7,930 mmfbm, compared to the same time in 2020 when it was 7,412 mmfbm.
North America Softwood Lumber Production, Sawmill Capacity Utilization, WWPA: October 2021
US sawmill production as a per cent of practical capacity for the first ten months of 2021 ticked down slightly, at 85%, compared to the same time in 2020 when it was 86%, said the Western Wood Products Association’s monthly Lumber Track.
Still improving over the previous year, Canadian sawmill production as a per cent of practical capacity in January to October 2021 was at 80% compared to the first ten months of 2020 when it was a very low 78%.
Softwood Lumber Prices Surge: Year-End 2021
A huge disruption to transportation for most of November from the critical lumber producing basket of the British Columbia interior, euphemistically referred to as “sawmill country”, caused a supply crunch for wood products which the market is currently still working out. Of all construction framing lumber in the US at any time, approximately 14% comes from BC, so such a big drop so suddenly is having a great impact on lumber prices.
Meanwhile, US home construction activity is very strong for this time of year. Total housing starts in the US for November 2021 soared by almost +12% from October, to a seasonally adjusted annual rate of 1.679 million units. This is an +8.3% improvement from the same month one year ago, when it was 1.551 million.
Madison’s Lumber Reporter‘s next website update of North America construction framing dimension softwood lumber prices will be Jan 18, 2022. We wish everyone a great Holiday Season!
Since players had not been stocking lumber inventory in hopes that prices would go down, they were caught short toward the end of they year so needed to buy at volumes when normally construction activity is very low.
For the week ending December 17, 2021 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) skyrocketed, up by a mind-boggling +$200 or +27% to US$950 mfbm, from $750 the previous week, said lumber industry price guide newsletter Madison’s Lumber Reporter. That week’s price is up by +$321, or +51%, from one month ago when it was $629.
Prices jumped significantly again and those who didn’t have inventory coverage were running out of time as most sawmills planned to start their two-week holiday shutdowns sooner rather than later.
Solid wood commodity prices experienced another surge as 2021 came to a close, with studs and standard grade dimension leading the way.” — Madison’s Lumber Reporter
Western S-P-F buyers in the United States were either sitting back after covering their early- to mid-January needs, or desperately scrambling to do so. January 17th order files were widely reported by both lumber and studs manufacturers. Production volumes remained low and the only perceivable pressure on prices was further upward.
Canadian purveyors of Western S-P-F lumber garnered consistent demand, with order files stretching into the back half of January on many items. Suppliers weren’t surprised to see inquiry wane as Friday approached, since many buyers had covered their immediate needs over the past fortnight and decided to shift into holiday-mode for the balance of the year.
Demand ebbed in the Eastern S-P-F market as the week wore on and buyers got quieter, mainly due to replacement costs marching inexorably upward. Sawmill availability remained tight and field inventories were still lean despite steady sales volumes through the first half of December.” — Madison’s Lumber Reporter
Compared to the same week last year, when it was US$874 mfbm, for the week ending December 17, 2021 the price of Western S-P-F 2×4 #2&Btr KD (RL) was up by +$76, or +9%.
Compared to two years’ ago when it was $398, that week’s price was up by +$552, or +139%.
US Housing Starts November and Softwood Lumber Prices December: 2021
A huge disruption to transportation for most of November from the critical lumber producing basket of the British Columbia interior, euphemistically referred to as “sawmill country”, caused a supply crunch for wood products which the market is currently still working out.
Of all construction framing lumber in the US at any time, approximately 14% comes from BC, so such a big drop so suddenly is having a great impact on lumber prices.
This problem with deliveries is due to a series of very powerful storms and massive flooding through November, which completely destroyed all four highways and both rail lines in southern BC. For details on the damage please go here: https://madisonsreport.com/2021/12/01/more-floods-british-columbia-nov-2021/
Meanwhile, US home construction activity is very strong for this time of year. Total housing starts in the US for November 2021 soared by almost +12% from October, to a seasonally adjusted annual rate of 1.679 million units. This is an +8.3% improvement from the same month one year ago, when it was 1.551 million. For their part, November permits for future homebuilding rose to 1.712 units, a +3.6% gain from the previous month, when it was 1.653 million. November 2021 permits are up almost +1% compared to one year ago, when it was 1.696 million.
November starts of single-family housing, the largest share of the market and construction method which uses the most wood, was 1.173 million annualized, an increase of more than +11% compared to October, when it was 1.054 million. Building permits are generally submitted two months before the home building is begun, so it’s quite unusual for this metric to be rising in November. Normally, not many builders want to break ground on a new house in January. Last year was different and 2021 is following suit; November 2021 single-family permits grew by almost +3%, at 1.103 million units, compared to October when it was 1.074 million units.
Shrewd investors know that construction framing softwood lumber prices are a good leading indicator for US housing activity, including home building and home sales. Don’t miss out, get lumber price data updates directly to your desktop every Friday morning.
Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir Price: December 2021
Looking at lumber prices, steadily rising at a time of year when demand is usually low, for the week of December 10, 2021 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) rose by +$40, or +6%, to US$750 mfbm, from the previous week when it was US$710, said weekly lumber industry price guide Madison’s Lumber Reporter. That week’s price was up by +$121, or +19%, from one month ago when it was $629.
STAY AHEAD of US housing price data by getting access to softwood lumber prices. Released every Friday for that week, since 1952 Madison’s Lumber Prices is used by the forest products industry as a price guide for North American construction framing dimension softwood lumber. These are, of course, the inputs into US and Canadian home building materials.
* Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS
US Housing 1-Unit Starts & Permits November and Benchmark Softwood Lumber Prices December: 2021
When compared to the same week one year ago, of $744, the price of Western S-P-F 2×4 for the week of December 10, 2021 was up by +$6, or +1%. Compared to two years’ ago when it was $394, that week’s price was up by +$356, or +90%.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Historical Perspective
To subscribe to Madison’s Lumber Reporter, simply fill out an order form here: https://madisonsreport.com/subscribe/
Madison’s BC Coast Log Price Report: Nov 2021
Lumber Prices November and US Housing Starts October: 2021
It is expected that next week the US Department of Commerce will announce the usual annual adjustment to the softwood lumber duty on Canadian forest products entering the US, the Administrative Review.
According the a previous announcement early this year, the duty will be increased to almost double what it has been for the past year.As supply-chain disruptions increased costs, new U.S. home construction slowed down in October, driven by a drop in single-family projects.
For October 2021, total residential starts in the US remained essentially flat from the previous month, at 1.520 million units. Continuing to improve as throughout this year, permits for future homebuilding in October were up by +4% compared to the previous month, when it was 1.586 million, to a rate of 1.650 million units. This is a +3.4% increase over October 2020, when it was 1.041 million units.
Looking at lumber prices, cresting just above levels for the same week last year, for the week ending November 12, 2021 the price of Western S-P-F 2×4 #2&Btr KD (RL) remained flat compared to the previous week, at US$620 mfbm.
That week’s price is up by +$11, or +2%, from one month ago when it was $609.
Madison’s Heating Wood Pellet Price Report: Oct 2021
Government of India Mandating Thermal Power Plants Use Biomass
In an effort to decrease stubble burning by farmers, India’s Ministry of Power has mandated that all thermal power plants burn a blend of agricultural residues and coal. The states of Haryana, Punjab, and Uttar Pradesh, along with the country’s largest power utility, NTPC, are consequently in the process of procuring more than two million tons of biomass pellets for co-firing in their power plants.
This latest mandate is part of the Ministry of Power’s National Mission of the use of Biomass aimed at addressing air pollution from stubble burning and reducing the carbon footprint of thermal power generation. According to government estimates, around 53,000 tons of biomass feedstock that would have other wise been stubble-burned have been utilized in power plants so far in 2021.
US Investment Firm Acquires Majority Stake in European Pellet Company
New York-based Apollo Global Management Inc. recently closed the acquisition of an 80 per cent stake in Estonia-based AS Graanul Invest. One of the largest producers of wood pellets in Europe, Graanul operates 12 pellet plants in the Baltic states and the United States with a combined annual capacity of 2.7 million tons.
The company also operates six combined heath and power (CHP) plants in Estonia and Latvia, and accounted for more than 17 per cent of the total renewable bioelectricity generated in Estonia in 2020. Apollo Global Management is an international asset management company based in the United States with assets totaling $455 billion.
Vietnam Becomes Second-Largest Exporter of Pellets Worldwide in 2020
Data from Vietnam’s General Department of Customs indicates the country exported approximately 3.2 million tons of biomass fuel pellets in 2020, making it the second-largest exporter last year. According to the Vietnam Timber and Forest Product Association (VIFOREST) export values have increased significantly over the past nine years, rising a whopping 1,426 per cent from USD$23 million in 2013 to USD$351 million in 2020.
Japan and South Korea are the major export markets for Vietnam’s biomass fuel pellets, which are made from sawdust, wood shavings, rice husks, and corn stover, among other feedstocks.
