As mid-April arrived it seemed like the recent practice of customers holding off buying volumes of wood, making purchases for immediate needs only, was becoming an entrenched habit.
Historically at this time of year the seasonal stocking up of lumber inventory would be well underway. However, given the late end to winter and recent harsh weather across the continent, construction activity at jobsites has been slow to get going. In addition, the uncertainty of larger economic conditions — from interest rates to housing starts — continues to keep lumber buyers cautious.
The overriding sentiment currently is of hesitance to stock up on inventory. Seasoned players warn this could become a problem, should building activity pick up suddenly, as the entire supply chain is very low on lumber supply.
As the extreme volatility and unprecedented high prices are
firmly in the past, the year-over-year trend for price changes is once again able to provide insight into what is happening currently — if not into what is to come this year.
Remaining steady at US$452 mfbm, that benchmark WSPF 2×4 price is now up by +$102, or +29% compared to the same week last year.
In the week ending April 12, 2024, the price of Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$452 mfbm, which is flat from the previous week when it was $452, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter.
That week’s price is flat from one month ago when it was $452.
There was a pause in demand as buyers waited to see if prices might erode. Players reported a two-tiered pricing structure opening up between sawmills and the distributors, as wholesalers with unfavourable contract positions and/or inventory levels got conspicuously aggressive with their numbers to entice buyers.
KEY TAKE-AWAYS:
- Most lumber sales continued to lag on sluggish inquiry.
- Small counter-offers were considered.
- Retailers bought at higher volumes; similarly the large builders took advantage of persistently low prices.
- The total amount of supply circulating in the market was slim.
- Builder yards needed to replenish their plywood and OSB inventories, thus nonchalantly increased their order volumes.
- Studs mills order files were into later April.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
