Current Softwood Lumber Prices Compared to Recent and Historical Highs: August 31, 3018

A seemingly incomprehensible North America softwood lumber market in 2018 continued it’s recent stabilization to end this pre-Labour Day holiday week somewhat moderated over last week.

In the past week softwood lumber futures on the Chicago Mercantile Exchange have swing between US$425 and US$450, which provided little additional insight to this puzzling year but at least wasn’t as wild a range as it has been. Also, contract closures are approaching closer to cash.

Madison’s still affirms that the new bottom for benchmark Western Spruce-Pine-Fir KD 2×4 #2&Btr prices will be US$500 mfbm before the end of 2018.

— Madison’s Lumber Reporter

Home building in the US continues quite a bit stronger than most had expected one year ago, and demand from new and emerging markets is showing startling strength. Conversely, the massive wildfires across the continent — and especially in the critical fibre supply basket of British Columbia — have removed significant timber supply to quite a few forestry and sawmill operators across the province.

SOURCE: Madison’s Lumber Reporter

Lumber production in the US is up approximately +5% from one year ago, according to the latest data from US Census and the Western Wood Products Association. That in Canada is down slightly, by approximately -2%, however with some regionality as most of that reduction is in BC.

However, a strange new turn that only Madison’s seems to recognize, US lumber and log exports have absolutely skyrocketed over one year ago. Please see full details on that brand-new data here:

US Softwood Lumber Exports: First Half 2018

US Coniferous Log Exports: First Half 2018

It’s very interesting that Canadian sawmills are being blamed for high lumber prices — in large part due to the current punishing US softwood lumber duties — while US lumber exports to China are demonstrating stunning increases.

SOURCE: Madison’s Lumber Reporter