Current Softwood Lumber Prices Compared to Recent and Historical Highs

As the North American softwood lumber market settled into “normal” — whatever the new normal is, we are still discovering that — prices on various construction framing commodities adjusted according to new production practices at sawmills and new buying habits of customers.

SOURCE: Madison’s Lumber Reporter

One plain example of this is big drops in #3/Utility and #4/Economy prices for Western Spruce-Pine-Fir 2×4 to 2×10 a couple of months ago.

For the week of July 20, Madison’s Lumber Reporter printed down $94 on WSPF KD #3 2×6, to US$230 mfbm from US$324 the previous week. Sources reported brisk sales of that popular item, which is used not only for concrete forming and other construction purposes but also for pallet, crate, and other packaging material production. Our market comment for that size in WSPF week of July 20 was, “Producers in British Columbia slashed prices on 2×6 #2&btr items, successfully ridding themselves of accumulated 6-inch straight lengths. Sawmill order files remained close but mills were not “panic-loading” in some cases as they were last week.”

This week WSPF KD #3 2×6 print was still US$230 mfbm, demonstrating that both producers and buyers agree this is a good level for that item.

Otherwise, softwood lumber prices in Canada and the US were waffling — generally in a downward direction — again this week.
However, the severe storms hitting the US northeast Thursday night are expected to cause significant damage. As always, purchase of lumber and panel to rebuild and re-roof will spike following the storms.

As we are only mid-way through September, it is very possible there will still be some big storms to come. Unfortunately.

SOURCE: Madison’s Lumber Reporter

The recent price drops, following an extremely hot market for all of this year, were serving their purpose: suppliers reported this week that sales have increased as customers were less reluctant to book orders when faced with lowered price lists. Sawmills, for their part, plumped up order files. But not too much, as they hoped prices will rebound in coming weeks and didn’t want to commit too far into the future at lower rates.

Most producers on the west side of North America this week reported slim order files, at one week only. This is not unusual for the time of year actually. It just goes to show how things have changed in two short years: a few years ago, most sawmills would be quite pleased with a one-week order file after the Labour Day long weekend.

While it is unusual to break new ground for home building in the US in October and November, there are a lot of construction projects still in the works now. These will need to continue ordering wood to complete before winter sets in.