It was at this time two years ago that the benchmark lumber price, of Western SPF 2x4s, reached the astronomical high of US$1,600 mfbm.
This radical increase eclipsed any price level previously seen by 3X.
Mayhem ensued throughout the lumber market, for suppliers and customers alike, as industry worked to adjust to this new high.
It is important to note, however, that while that was the real price for wood at the time, there was little volume actually sold.
It is also important to note that when prices did begin to drop again, that correction down was much lower than what the price level had been before the extreme rise. This kind of stark volatility is not favoured by sawmills or wholesalers; indeed they would rather sell high volumes of lumber at a lower price.
Since mid-2022 when increasing lending rates became a reality the demand for lumber has evened out, providing industry the ability to keep prices much more level.
Thereby giving some much-needed stability to the market.
In the week ending June 16, 2023, the price of Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$390 mfbm, which is up by +$30, or +8%, from the previous week when it was $360, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter.
That week’s price is up by +$33, or +9%, from one month ago when it was $358. Some buyers shopped the same tally repeatedly throughout the week only to come away empty-handed.
The dam finally burst in lumber and studs sales, yielding the strongest week of demand seen in months. Sales of panels were busier too, but not as dramatically.
Demand for Western S-P-F picked up steam according to traders in the United States. Sales of both studs and dimension surged, with studs posting the most gains in pricing. US players were adamant that the catastrophic wildfire situation in Canada was the main driver of this recent jump in business. This new burst in activity was lead by retail customers scrambling to cover supply needs for construction jobs they may have become complacent on.
With lumber Futures at a notable premium to cash in this tradable market, buyers were wringing their hands more than usual over every lost deal.
Both primary and secondary suppliers of Western S-P-F dimension lumber in Western Canada were busier than they have been in months.
It was better-late-than-never as players had thought real spring sales volumes might never arrive. With lead times pushing three weeks in some cases, purveyors urged their charges to cover more than just short-term needs.
Sawmill curtailments and wildfires helped motivate buyers to protect against future supply disruptions.
Green Douglas-fir seemed to be leading the charge in the recent Hemlock/Fir resurgence of demand, with another impressive bout of sales activity and price gains observed. Now in strong positions relative to recent weeks, coastal sawmills were claiming to be off-the-market. Traders speculated that producers raised their pricing numbers too aggressively to start this run, however, and noted signs of stalling momentum in demand.
Dimension items sold steadily throughout the week and plateaued in price around Wednesday, while studs’ sales continued to roar back to life. With most reported order files extended into July, suppliers expected the remainder of June will be hale and hearty.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
