Softwood Lumber Sales Tepid as Prices Fall Further

North American softwood lumber traders on both sides of the border described sales as sloppy and “uninspiring.”

Lumber demand at the wholesaler level in Canada and the US last week was lackadaisical at best and disinterested at worst. While home construction and sales activity in the US is slowly improving, there has been no increase in demand since the large sales volumes of one year ago. Operators in Canada have made more inroads to selling lumber products into new and emerging markets, specifically Korea and Taiwan. At the same time however, EU exporters of spruce lumber have almost doubled their sales into USA in the past year compared to historic volumes. Now that their product has consistently met standard and has been accepted by the marketplace, expectations are for those US imports of EU spruce lumber to increase sharply in coming years.
According to Western Spruce-Pine-Fir purveyors in the United States, last week was another example of the muted demand that developed over the month of July. Consumer confidence remained low and customers weren’t interested in buying lumber any further out than one or two weeks, which also happened to be the length of reported sawmill order files. Further price reductions enticed pockets of buyers each day, but overall business was uninspiring.

Lackadaisical demand persisted as the Eastern Canadian construction holiday began. — Madison’s Lumber Reporter

Prices of most lumber items lost ground again last week, however for some specialty items like Douglas fir, studs, and plywood prices actually increased.
Benchmark item Western Spruce-Pine-Fir KD 2×4 #2&Btr wholesaler price this week was US$352 mfbm, down another -$16, or -4.4%, compared to last week when it was US$368 mfbm. This week’s price is -$50, or -12%, less than it was one month ago. Compared to one year ago, this price is down -$194, or -36%.

Madison's Weekly Movers & Shakers Softwood Lumber and Panel Prices Chart JULY '19

Be ahead of these data releases … Don’t delay, this week’s softwood lumber market comment was published to the website Monday morning.

Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS

Compared to historical trend, this week’s WSPF KD 2×4 #2&Btr prices are down -$33, or -8.5%, relative to the 1-year rolling average price of US$385 mfbm and down -$99, or -22%, relative to the 2-year rolling average price of $451.

Sawmills in Eastern Canada noted that they didn’t have oodles of volume committed for production when they come back from the fortnight break. — Madison’s Lumber Reporter

Western Spruce KD 2x4 #2&Btr prices 2011 - JULY 2019

WSPF sawmills in Canada got more of the same from customers last week. Buyers were cautious, demand muted, and sawmill order files were seldom more than one week.
The odd producer reported marginal log supply problems due to rainy weather, but transportation and fibre supply were generally non-issues.
Sales activity was lacklustre. Lower asking prices did little to cajole customers into buying.

The below table is a comparison of recent highs, in June 2018, and current July 2019 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of Sept 2015:

Madison's Historical Softwood Dimension Lumber Price Comparison Table JULY 2019