As more cold and snow descended yet again across North America, construction activity remained stalled thus lumber sales were similarly slow.
Those purchases which were made were generally for just-in-time buying or immediate needs; almost no one was stocking up on inventory yet for this looming spring building season. For their part, sawmills could only hold off increasing production volumes to keep supply in line with ongoing muted demand.
Stocking wholesalers tried to play the inventory-advantage game, only to end up selling small volumes at below current replacement costs.
All eyes were on the weather, as expectations were for a burst of building to come as soon as the weather improves.
Secondary suppliers did replenish some of their stock, while downstream buyers jumped in to cover only their short-term needs with small volume purchases.
In the week ending March 3, 2023, the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$400 mfbm, which is down by -$17 or -4%, from the previous week when it was US$417 mfbm,
was US$417 mfbm, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter.
This is down by -$56, or -12%, from one month ago when it was $456.
Slow demand for panels was a carbon copy of the previous week, while a two-tiered market developed in lumber and studs’ sales.
Following the previous week’s deep price cuts at the sawmill level, sales of Western S-P-F in the US perked up a bit at the beginning of March.
Overall, the market felt healthier according to players, but it wasn’t gangbusters yet. Better takeaway allowed mills to push their
order files into the second or third week of March, with production of nine-foot studs the furthest out due to ongoing tight supply. Customers remained reluctant to begin spring buying for many reasons; chief among them sustained winter weather and the troubling economic outlook.
Traders of Western S-P-F lumber in Western Canada reported an uneven pace to business. Some customers found their preferred numbers and secured short-term coverage, while others continued to hold off from buying to see if there will be more downside to pricing. Double-digit price corrections swept across nearly every dimension
item, with High- and Low-Grade categories hit the hardest. Ongoing winter weather in many regions helped buyers keep to the sidelines. Availability among both primary and secondary suppliers was ample again, while sawmill order files were anywhere from prompt to two weeks out.
Eastern S-P-F trading was decent at the start of March, with primary and secondary suppliers reporting good takeaway amid a more optimistic tone. That trend was reinforced as the week wore on, with sawmills stabilizing their numbers noticeably from the weaker levels observed on Monday. Sales volumes grew as a midweek push came from buyers who felt a bit of pressure to secure short-term coverage. Business tapered off to a slow burn later in the week according to suppliers.
Producers were able to nudge their order files out to mid- or late-March, while secondaries competed with each other for limited orders then ended up selling below replacement levels. Buyers were squarely focussed on small volumes of the most readily-available and cheapest wood possible.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
