Lumber prices rise amid reports of supply holes in eastern Canada, U.S.

October 3, 2014
Provided by: Madison’s Lumber Reporter

North American dimension lumber and panel prices waffled back upward this week as seriously depleted field inventories of solid wood products and an up-limit lumber futures board Wednesday collided to stop the two-week drop in most prices, according to weekly building materials price newsletter Madison’s Lumber Reporter.
Secondary suppliers and retail yards had to come to the table this week, particularly in the US and eastern Canada as supply holes could no longer be ignored. The recent price slide was stopped, or reversed by a few dollars, with even specialty products like Douglas fir green recovering from recent drops.
For it’s part, Oriented Strand Board 7/16” Ontario bubbled back up to C$212 per thousand square feet after falling to $205 a couple of weeks ago.
Panel mills and most sawmills were able to push order files out past mid-October on real demand from customers buying wood for immediate needs.
Benchmark lumber commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr lost another $2 after falling for two weeks, to finish Friday at US$350 per thousand square feet. This is an $18, or 4.9 per cent, drop from one month ago’s $368, and $6, or 1.7 per cent, below the same time last year of US$356.

SOURCE: Madison's Lumber Reporter
SOURCE: Madison’s Lumber Reporter

In other lumber news this week, sawmill production out of the US for January to July 2014 increased by 5 per cent compared to last year to 17,521 billion board feet, while that in Canada remained even at 14,523 bbf, according to the Western Wood Products Association’s “Lumber Track” Friday. Capacity utilization at US sawmills was 83 per cent for the first seven months of 2014, compared to 79 per cent one year ago, while in Canada production levels were at 79 per cent, compared to 80 per cent last year.
In company news this week, Canfor Corp, out of Vancouver, BC, announced Wednesday the purchase of the operating assets of Southern Lumber Co. The acquisition includes a sawmill located in Hermanville, MI, which is a large log southern yellow pine dimension mill manufacturing predominately long, wide width lumber. The sawmill is in an area of exceptionally high quality fibre and is well suited for higher value product lines. After reflecting near term capital, the operation has a capacity of 90 million board feet. The purchase price excluding working capital is US$48.7 million and the completion of the transaction is expected at the end of 1Q 2015 and is subject to customary closing conditions.

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Keta Kosman
Madison’s Lumber Reporter
604 984-6838