Just last week the US Census, Statistics Canada, and Industry Canada have updated data for Canadian and US lumber and log sales and export, and Canadian softwood lumber production and sales.
Most of the insight to emerge from this latest data is as expected, but one thing which seems to have slipped past most observers — except of course your weekly Madison’s Lumber Reporter, which started pointing this out halfway through 2017 — is that exports of US southern yellow pine logs have skyrocketed +25% compared to 2016, with the vast bulk of this going to China. Similarly, US import of lumber from China (mostly furniture/components/laminates/packaging, and not construction framing lumber) leapt +21% in 2017 compared to the previous year.
The other bombshell this week was the World Trade Organization’s acceptance of two Canadian complaints about the accuracy of US claims underlying these latest softwood lumber duties.
Yet elsewhere, Statistics Canada reported Monday that January lumber production in Canada rose +20.8% from December, to 5,829 thousand cubic metres, up +0.3% from January 2017. Sawmills shipped 5,291 thousand cubic metres of lumber in January, up +10% from December but -2.9% lower than in January 2017.
The below table is a comparison of June 2017 and April 2018 prices for benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05:
Current Softwood Lumber Prices Compared to Recent and Historical Highs
The terrible transportation issues since February only started to get worked out for the north and west of Canada and the US last week, while in the east the tremendous backlog eased noticeably.
Demand however, was actually increasing. This week players reported brisk selling into Canada; prices quoted at current print were as without duty. Those reluctant to buy at volume given these ever-rising prices picked around at odd sizes and products in an effort to fill immediate needs. Sawmill order files remained a manageable three weeks or so.
For it’s part, after settling down-limit to $523 on Wednesday, lumber futures on the Chicago Mercantile Exchange closed Thursday on the May contract at $524. After-hours quotes Thursday, however, were up $5 to $528.
With Madison’s print last week on benchmark WSPF KD 2×4 #2&Btr up $6 to $546, many wondered if there is indeed enough ongoing demand for prices to rise further, or if this level might be the ‘new normal’. Only the approaching weeks will tell.