Weekly Softwood Lumber Blog

In a reversal of the previous few months, for January 2021 the softwood lumber production volumes and sawmill capacity utilization rates in Canada improved significantly, while that in the United States dropped by a notable amount.

As people look for answers to why lumber prices continue to go so much higher, these production and sawmill capacity data explains a lot.
Given that housing and remodelling activity is going higher even than last year, it is clear there simply is not enough solid wood building materials supply to keep up with relentless, and increasing, demand.

US and Canadian housing activity in the month of April is actually showing increases over the sharp rises of the previous year, and the latest data of demand demonstrates more strength yet to come as spring arrives. Demand for softwood lumber is increasing as sawmills are literally just doing their best to keep up.
After improving for most of last year, compared to the same month one year ago, for January 2021 softwood lumber production in the US dropped nominally, down by -5.3%, says the latest issue of the Western Wood Products Association’s monthly Lumber Track.
US lumber production volumes in January were 3,060 mmfbm compared to one year ago when it was 3,230 mmfbm. Indeed, looking at the month of January against December 2020, US softwood lumber production fell by -3% from 3,153 mmfbm for December 2020.
Last month’s update here: https://madisonsreport.com/2021/03/09/north-america-softwood-lumber-production-sawmill-capacity-utilization-wwpa-full-year-2020/
After dropping abysmally for most of last year, softwood lumber production in Canada improved dramatically in January 2021 compared to the previous month. Manufacturing volumes increased by +9.7% in January 2021, to 2,003 mmfbm, compared to the same month last year when it was 1,826 mmfbm.
Specifically in British Columbia, sawmill production volumes for January 2021 improved significantly, up by +17% to 819 mmfbm, compared to January 2020 when it was 699 mmfbm.

North America Softwood Lumber Production, Sawmill Capacity Utilization, WWPA: January 2021

US sawmill production as a per cent of practical capacity for January 2021 improved to 91% from 87% in the same month last year, said the Western Wood Products Association’s monthly Lumber Track.
After terrible lows for most of last year, Canadian sawmill production as a per cent of practical capacity recovered significantly in January 2021, to 85% compared to one year ago, when it started dropping off the cliff to 70%.

It was an uneven lumber market for the week ending March 26 as print prices came in all over the place; some up, some down, and many flat.
The price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr rose another +$28, or +3%, to US$1,040 mfbm, from $1,012 the previous week.

Again staying flat from the previous week, in the week ending March 26, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr remained level at US$1,040 mfbm, said Madison’s Lumber Reporter.
That week’s price is again +$42, or +4%, more than one month ago when it was $998.

It was an uneven lumber market for the week ending March 26 as print prices came in all over the place; some up, some down, and many flat.

After waffling for a couple of weeks, the good forward indicator — as mentioned in Madison’s previous few updates— of Canadian Softwood Plywood 9.5 mm Toronto, popped up +$24, or +2%, to end that week at C$1,276 msf, from $1,252 the previous week. The other good forward indicator, Oriented Strand Board 7/16” Ontario, soared +$50, or +3.4%, to C$1,475 msf, from $1,425.
There are fewer panel mills than dimension lumber sawmills, so producers are more disciplined in terms of keeping supply close to demand. As well, panel suppliers are better able to withstand counter-offers so those price changes are usually somewhat ahead of dimension lumber price movement.

Persistently low overall lumber supply ensured that demand remained steady even as buyers sensed softwood prices stabilizing.” — Madison’s Lumber Reporter

— Madison’s Lumber Reporter

For the week ending March 26, US Western S-P-F sawmills stayed the course, pushing their order files into the week of April 19th. Buyers were definitely more cautious but their low field inventories and the perpetually-undersupplied market forced them back to the table frequently for small volume deals. Players noted an increase in the availability of low grade WSPF commodities from mills, but if they blinked that supply was gone.

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

After a fortnight or so of quieter activity Western S-P-F producers in Canada got busy again. Starting on Tuesday of that week, buyers began to clamour more urgently for new orders as well as those already in the logistical pipeline. Sawmill order files stretched into mid-April on most items, with shipment-lag putting delivery closer to the end of May.

Demand for Kiln-Dried Douglas-fir strengthened. Robust sales continued to outstrip comparatively meagre supply as buyers hoped for a break in pricing. Sawmill order files ranged from April 5th to April 19th.”

— Madison’s Lumber Reporter

Again staying flat from the previous week, in the week ending March 26, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr remained level at US$1,040 mfbm, said Madison’s Lumber Reporter.
That week’s price is again +$42, or +4%, more than one month ago when it was $998.

Compared to the price one-year-ago, of US$356 mfbm, for the week ending March 26 benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was again selling for US$1,040 mfbm which is +684, or +192% more.

As suggested by Madison’s in the previous two weeks, benchmark softwood lumber prices did indeed remain flat for the week ending March 19 as customers digested previous orders.
However prices of less-usual grades, sizes, and species did increase.

Industry players noted that the price spread between #3/Utility grade and standard-grade #2&Btr has closed remarkably; in fact those disparate items are selling for almost the same price. As well, prices of straight-lengths have risen as buyers search for replacement items in the face of incredibly strong benchmark commodity prices.
By way of comparison, in Western Spruce-Pine-Fir the benchmark item — most often quoted by Madison’s and the item most heavily represented in Futures pricing — WSPF KD 2×4 #2&Btr R/L remained at US$1,040 mfbm, while #3/Utility was selling for US$950 (which was also flat from the previous week). For it’s part, WSPF KD 2×4-8’ (also known as specified-lengths) was the hot item, selling for US$938 which was up +$20, or +2%, from the week before. In the coming weeks, Madison’s will make a graph comparing these particular items, so readers can see the change in price spread over time.

Most players agreed that while prices appeared to be plateauing, the market remained drastically undersupplied.”

— Madison’s Lumber Reporter

For the week ending March 19, even as sales waned according to Western S-P-F sellers in the US, the undersupplied nature of the market remained apparent. One savvy trader noted, “Inventory is your friend.” Sawmill order files were into the first and second weeks of April depending on the source and item. Logistical efficiency was also variable from mill-to-mill.
While Western S-P-F producers in Canada continued to emphasize strong demand, sales were definitely quieter last week. Sawmill order files were into the week of April 12th and shipments remained roughly three weeks behind that. Low grade was again a focus among active buyers as its discount to #2&Btr attracted more business. 

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

Southern Yellow Pine dealers described plateauing prices, with customers becoming more circumspect as they digested incoming orders and watched for signs of softness. Accounts from dimension sawmills varied; depending on the region and item in question, some were taking small counter offers while others were apparently quite busy.”

— Madison’s Lumber Reporter

Again staying flat from the previous week, in the week ending March 19, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr remained level at US$1,040 mfbm, said Madison’s Lumber Reporter.
That week’s price is again +$42, or +4%, more than one month ago when it was $998.

Compared to the price one-year-ago, of US$440 mfbm, for the week ending March 19 benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was again selling for US$1,040 mfbm which is +634, or +156% more.

Home prices across the US surged more than +10% in December, indicating a strong demand in the housing market. According to the S&P CoreLogic Case-Shiller Indices, home prices continued the trend of accelerating that began in Summer 2020 as the coronavirus pandemic drove people from urban apartments to buy suburban homes.

Softwood Lumber Prices as Leading Indicator of US House Prices
The median sales price of new houses sold in January 2021 was $346,400, which is up more than +5% from a year ago.

A federal index, meanwhile, of metro area house prices rose +9% last year, the biggest increase in 30 years of data. The Federal Housing Finance Agency‘s national price index rose +10.8%, which is also a record.

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

Currently it is common for sellers to receive multiple bids, and for buyers to waive contingencies like inspections and appraisals to make their offers more attractive. These soaring prices are being driven by three factors: mortgage rates under 3%, a demographic bulge as the millennial generation reaches prime home-buying age, “the great reshuffling.”
Due to the pandemic people are reassessing what their needs are in a house. A family that was satisfied with three bedrooms might want one more for a home office. A large backyard becomes more important when the kids are stuck at home.

Benchmark Softwood Lumber Price Western Spruce-Pine-Fir 2×4: 2018 – 2021

For the week ending March 19, even as sales waned according to Western S-P-F sellers in the US, the undersupplied nature of the market remained apparent. One savvy trader noted, “Inventory is your friend.” Sawmill order files were into the first and second weeks of April depending on the source and item. Logistical efficiency was also variable from mill-to-mill.
While Western S-P-F producers in Canada continued to emphasize strong demand, sales were definitely quieter last week. Sawmill order files were into the week of April 12th and shipments remained roughly three weeks behind that. Low grade was again a focus among active buyers as its discount to #2&Btr attracted more business. 

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

STAY AHEAD of US house 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.
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: https://madisonsreport.com/subscribe/

New-home purchases account for about 10% of the market and are calculated when contracts are signed. They are considered a timely barometer of the current real estate market.

Sales of new single-family houses in the US for February 2021 were at a seasonally adjusted annual rate of 775,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is +8.2% above the February 2020 rate but is down -18.2% from January 2021, which was at a revised rate of 948,000. Harsh winter weather across almost all of the continent is to blame for the reduction, which is expected to be temporary.

Benchmark Softwood Lumber Prices March & US NEW Home Sales Feb 2021

Demand for housing is being driven by Americans seeking more space for home offices and schooling as the year-long coronavirus pandemic drags on.
Builder backlogs of projects awaiting construction remain elevated and indicate residential building will stay firm in coming months and contribute to economic growth.

Benchmark Softwood Lumber Price Western Spruce-Pine-Fir 2×4: 2018 – 2021

For the week ending March 19, even as sales waned according to Western S-P-F sellers in the US, the undersupplied nature of the market remained apparent. One savvy trader noted, “Inventory is your friend.” Sawmill order files were into the first and second weeks of April depending on the source and item. Logistical efficiency was also variable from mill-to-mill.
While Western S-P-F producers in Canada continued to emphasize strong demand, sales were definitely quieter last week. Sawmill order files were into the week of April 12th and shipments remained roughly three weeks behind that. Low grade was again a focus among active buyers as its discount to #2&Btr attracted more business. 

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

STAY AHEAD of US home sales 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.
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: https://madisonsreport.com/subscribe/

As often mentioned by Madison’s, panel prices — especially Plywood but also OSB — tend to lead movement in construction framing dimension softwood lumber prices. The graph below illustrates the sharp increase in panel prices through 2020 and in 2021 so far:

In the week ending March 19, 2021, the price of Canadian Softwood Plywood 9.5mm (or 3/8″) FOB Toronto was C$1,252 msf. This is up +$2 from the previous week when it was $1,250.
This week’s price is up by +$263, or +27%, from one month ago when it was $989. When compared to the same week last year, when it was $431, this week’s price is up by +$821, or +190%.
Compared to two years ago when it was $489, this week’s price is up by $+763, or +156%.

Meanwhile, in the week ending March 19, 2021, the price of Oriented Strand Board 7/16″ Ontario was C$1,425 msf.
This is up by +$25, or +2%, from the previous week when it was $1,400. This week’s price is up by +$248, or +21%, from one month ago when it was $1,177. When compared to the same week last year, when it was $400, this week’s price is up by +$1,025, or +256%.
Compared to two years ago when it was $265, this week’s price is up by +$1,160, or +438%.

Will upward price pressure maintain? New data coming out in 2021 will let us know.
Only time will tell! Subscribe to Madison’s Lumber Reporter today and receive this vital softwood lumber and panel price information on-time Friday mornings every week.

Potentially signalling a plateau in lumber prices, at least for the time being, benchmark softwood lumber commodity items stayed flat again last week while plywood prices lost almost all the gains of the previous week.
However, supply remained incredibly tight as customers still had to search around for the specific items they wanted at prices that didn’t make them balk.

Many players consider this a temporary lull, due to recent harsh winter weather across most of North America. As temperatures move toward spring balmy conditions, expectations are that building activity in Canada and the US will ramp up to the frenzy seen last year.
Stepping up increases over three weeks, prices of benchmark panel item Canadian Softwood Plywood Toronto 9.5 mm rose by +C$40, or +3%, to C$1,250 msf from C$1,210 the previous week. This item is now +C$288, or +29%, higher than one month ago when it was C$989 msf.

The upward trend in many commodity prices appeared to be slowing, even as strong demand persisted.”

— Madison’s Lumber Reporter

For the week ending March 12, Western S-P-F purveyors in the US were busy again. Players noted there was no room for hesitancy in this market, as anyone who slept on an order lost it. Sawmill order files were pushing into April.
Canadian Western S-P-F dealers saw demand perk back up as order files at sawmills extended into the week of April 5th and rail car supply improved marginally. WSPF 2×4 prices topped out last week at an astonishing $1,040 and demand didn’t miss a beat as customers searched for other items.

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

Again staying flat from the previous week, in the week ending March 12, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr remained level at US$1,040 mfbm, said Madison’s Lumber Reporter.
That week’s price is again +$42, or +4%, more than one month ago when it was $998.

Sales activity slowed down a trifle in the US Northeast, but stocking wholesalers on the US eastern seaboard expected any pushback would be temporary. Prices advanced again significantly, giving many customers sticker shock after they thought they’d grown numb to that.”

— Madison’s Lumber Reporter

Compared to the price one-year-ago, still at US$446 mfbm, that week benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was again selling for US$1,040 mfbm which is +594, or +133% more.

Headline edited to correct Plywood price movement. We apologize for any confusion this error may have caused -- Madison's Lumber Reporter

Most of North America remained in the grip of truly harsh winter weather last month, so it’s no surprise that February housing starts in the US continued drops seen in January.

Compared to February 2020 total residential starts in the US last month fell by -9.3% to a 1.42 million annualized rate, from 1.57 in the same month one year ago.
As in January, permits for future homebuilding again rose sharply compared to one year ago, this time by +17% to a rate of 1.68 million units last month compared to February 2020 when it was 1.44 million.

US Housing Total and 1-Unit Starts January & Benchmark Softwood Lumber Prices February 2021

February starts of single-family housing, the largest share of the market and construction method which uses the most wood, fell by -1% compared to February 2020, at 1.04 million. Once again providing good indication for an increase in near-term future home building, single-family permits, meanwhile, were at 1.14 million, a significant jump of +12.5% compared to the same month last year, when it was 1.00 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:

As for lumber prices, again staying flat from the previous week, in the week ending March 12, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr remained level at US$1,040 mfbm, said Madison’s Lumber Reporter. That week’s price is +$42, or +4%, more than one month ago when it was $998.

Compared to the price one-year-ago, of US$446 mfbm, benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was again selling for US$1,040 mfbm which is +594, or +133%, more.

Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir Price: March 2021

STAY AHEAD of US housing starts 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

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

Benchmark Softwood Lumber Prices Flat as Demand Flows to Alternate Commodities

For the week ending March 12, Western S-P-F purveyors in the US were busy again. Players noted there was no room for hesitancy in this market, as anyone who slept on an order lost it. Sawmill order files were pushing into April.
Canadian Western S-P-F dealers saw demand perk back up as order files at sawmills extended into the week of April 5th and rail car supply improved marginally. WSPF 2×4 prices topped out last week at an astonishing $1,040 and demand didn’t miss a beat as customers searched for other items.

Prices of benchmark softwood lumber items, like standard grade #2&Btr R/L stayed mostly flat for the week of March 5 — particularly on the west side — as customer demand flowed into other items.

FOR THE WEEK ENDING MARCH 5 there was quite a pop in #3/Utility grade and #4/Economy prices across all species and sizes, as well as a rise in Western and Eastern Spruce-Pine-Fir straight-lengths — especially for the 2×6 dimension.
Delayed delivery times continued to put a real crimp in supply; at this point operators don’t even know when, or if, their rail cars are going to arrive.
While the urgency of booking orders seemed to have eased, many speculate that this was just a temporary easing. Expectations are that the “big buy” for lumber in advance of spring is not yet over.

As spring building season neared demand and prices showed no signs of softening.”

— Madison’s Lumber Reporter

Those seeking a forward indicator need to look no further than plywood: prices of benchmark plywood item Canadian Softwood Plywood Toronto 9.5 mm soared +C$145, or +11%, to C$1,303 msf from C$1,160 the previous week.
This item was +C$316, or +32%, higher than one month ago when it was C$989 msf.

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

Demand in Eastern Canada was strong again according to Eastern S-P-F dealers. Buyers tried to push back against advancing prices but there were too many folks who needed product with a desperation. Sawmills boosted their asking prices into both the Great Lakes and Toronto markets as their order files stretched into the first half of April. Builders voiced their mounting concerns about supply shortages and delays of virtually every manufactured product under the sun. ”

— Madison’s Lumber Reporter

For the week ending March 5, US Western S-P-F sawmills maintained two- to four-week order files on the back of steady. Availability of transportation equipment was a constant bottleneck for suppliers, with complaints coming from all over about delayed rail cars and limited trucks and drivers.

The upward trend was on display again for Canadian Western S-P-F commodities, especially in 2×6 and wider. Prices of low grade also climbed again, though producers noted a seeming plateau in demand for those items. Producers sold into the week of March 29th, but transportation issues pushed delivery at least two weeks further out. Log supply was in comparatively good shape after frigid weather froze much of the interior region of BC. Producers were in the process of getting their decks ready for spring breakup.

In an apparent plateau after reaching dizzying heights, in the week ending March 5, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr was flat at US$1,040 mfbm, said Madison’s Lumber Reporter.
That week’s price is +$42, or +4%, more than one month ago when it was $998.

Compared to the price one-year-ago, of US$446 mfbm, for the week of March 5 benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was selling for US$1,040 mfbm which is +594, or +133% more.