Confusion and Volatility Did Little to Stymie Softwood Lumber Demand: Feb 14, 2018

Last week has started to come out actual data of timber supply loss due to wildfires in northwest North America, and it’s really bad. Details to come.

Otherwise, lumber demand continued strong even as customers digested the rush of wood ordered three weeks ago. As extreme transportation woes continued unabated, sawmills took to quoting on delivery times not orders files.

In British Columbia, a Port Alberni sawmill fire started Tuesday near the conveyors that drop chips from the hog fuel into a bin. The bin had been smouldering in the sawdust at the Alberni Pacific Division (APD) Mill owned by Western Forest Products.

Current Softwood Lumber Prices Compared to Recent and Historical Highs

Confusion reigned among customers as operators worked desperately just to get logs in and lumber out:

SOURCE: Madison’s Lumber Reporter

Having gone round to sawmills and distributors looking to fill inventory holes, customers were met with sustained strong prices or even increases. Prices on specialty items and sizes have already been increasing by more than standard items; this week those leapt up by alarming ratios as supply was simply not available and sawmills were not confidently able to quote a date for production.

A very good source to Madison’s has provided some information on the large loads of European lumber 2×8 which arrived to the US east coast a few weeks ago, initially destined to be ripped down to 2x4s for US home building purposes but were rejected due to not meeting building standards:

Wrote Harald Mack of EUWID Woodproducts and Panels in an email to Madison’s Tuesday:

“Some 25-30 million bdft are affected, delivered by 4-5 Swedish and German sawmills.

Primarily it seems to be a problem with WCLIB. In the past, the inspectors have been broad-minded when it comes to hold grading standards. Since August/September last year, this changed to the opposite. Lowest variations are sanctioned.”

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

SOURCE: Madison’s Lumber Reporter