Historically Labour Day has been a marker of how robust is demand for construction framing dimension softwood lumber.
In times of a weak market, following this long weekend demand has been soft and prices have fallen. During times of ongoing new home building activity, demand has been strong and prices stay flat or might even increase. As industry players are still waiting to find out what are the new market conditions and annual price cycle of lumber, this year the week following Labour Day will show a lot.
As demonstrated by the graphs here, most lumber prices did soften somewhat during the summer, then firmed upward in August. Reduced supply and almost total lack of inventory in the field are reasons why prices rose.
At the end of August they approach quite close to the same time last year, which might indicate a good supply-demand balance for the remainder of 2024
In the week ending August 30, 2024, the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$396 mfbm. This is flat from the previous week when it was $396, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter.
That week’s price is up +$57, or +17%, from one month ago when it was $339.
Demand was a jot slower following the frenzy generated by last week’s short-lived Canada-wide rail strike. All eyes were on post-Labour Day long weekend for indication of market conditions.
KEY TAKE-AWAYS:
- There was a sense of cautious optimism as Labour Day approached.
- Players reported an increasing pace to demand with each passing day.
- After the frenzy of panic-buying created by the potential rail strike in Canada, demand for WSPF lumber was a bit quieter.
- Buyers paused to assess their inventory needs after the comparative chaos of potential rail strike.
- High log costs relative to market returns caused Eastern Canadian producers to throttle production of certain items and widths.
- Ongoing softness in OSB prices was staved off by the recent logistics upheaval.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
