North America construction framing dimension softwood lumber and panel prices used in Canadian and US home building. Explanation of the seasonal cycle for softwood lumber buying as well as investment the sawmills need to make for their feedstock — log supply and inventory.
Madison’s Lumber Reporter: Softwood Lumber Price Data Explanation
North America construction framing dimension softwood lumber and panel prices used in Canadian and US home building. Explanation of the various products, including tables and graphs showing current prices against a historical perspective.
Madison’s Lumber Reporter: January 11, 2021 Softwood Lumber Prices Update
Compared to the price one-year-ago, of US$402 mfbm, last week benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was selling for US$944 mfbm which is +$542, or +135% more.
Unstoppable demand over the Holiday Season pushed prices relentlessly higher, for the week ending January 8, 2021 benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr prices rose to US$944 mfbm, which is up another +$70, or +8%, over the previous week, said Madison’s Lumber Reporter.
Last week’s price is +$324, or +52%, more than it was one month ago when it was $620.
New Year 2021 Starts Off With Rising Softwood Lumber Prices
In the first full week back to work of 2021, the latest data of housing construction and home sales out of the US shows a marked increase over the previous year. The economic indicators for future home building, and remodelling, are rosy.
Macroeconomic conditions in the US remain murky, however there are two things that can be solidly stated even at this year part of the year: one is that home builders are reporting difficulty in finding lots for purchase. The other is that there is challenges finding additional workers to hire. Indeed, the latest US data release shows the 472,500 new residential construction jobs created from May through December 2020 offset the 456,800 jobs that were lost in April and May. As well, for full-year 2020, home building and remodelling added 57,200 net jobs in the US.
While it’s too early in the year to say where the lumber market will go, it can be assured that prices will not go down during 2021.
Lumber sales barely missed a step over the holiday break. As 2021 dawned, rail service got significantly worse.
— Madison’s Lumber Reporter
The traditional slowdown associated with the Holiday Season was much shorter and smaller in magnitude than in previous years, according to Western S-P-F purveyors in the US . Demand did not wane; producers boosted their asking prices by double digits or more.
Canadian Western S-P-F producers reported demand tapered off at the end of 2020, partially due to lockdowns and curfews in Quebec, so sawmills tried to focus on selling into the US market. However, persistent lack of rail car supply caused logistical headaches, pushing delivery times into mid-March. Sawmill order files were already into the first week of February.
Compared to the price one-year-ago, of US$402 mfbm, last week benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was selling for US$944 mfbm which is +$542, or +135% more.
Unstoppable demand over the Holiday Season pushed prices relentlessly higher, for the week ending January 8, 2021 benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr prices rose to US$944 mfbm, which is up another +$70, or +8%, over the previous week, said Madison’s Lumber Reporter.
Last week’s price is +$324, or +52%, more than it was one month ago when it was $620.
Sales of Eastern S-P-F in Eastern Canada were comparatively slow to start the New Year but by Tuesday of last week business picked up. Although numb to sticker shock by this point, buyers nevertheless did double takes at more triple-digit price increases, as they assessed their bare inventories and calculated their next moves.
— Madison’s Lumber Reporter
The above table is a comparison of recent highs, in Sept 2020, and current January 2021 benchmark dimension Softwood Lumber 2×4 prices, compared to historical highs of June 2018 and compared to recent lows of Sept 2015:
US Railcar Loadings: 2020
Total combined U.S. traffic for 2020 was 25,157,476 carloads and intermodal units, a decrease of -7.2% compared to last year.
Total U.S. carload traffic for the first 12 months of 2020 was 11,482,059 carloads, down -13%, or 1,705,963 carloads, from the same period last year; and 13,675,417 intermodal units, down -2%, or 255,634 containers and trailers, from last year, said the Association of American Railroads Wednesday.
U.S. railroads originated 1,101,324 carloads in December 2020, down -3.7%, or 42,666 carloads, from December 2019. U.S. railroads also originated 1,334,495 containers and trailers in December 2020, up +12%, or 145,126 units, from the same month last year.
Combined U.S. carload and intermodal originations in December 2020 were 2,435,819, up +4.4%, or 102,460 carloads and intermodal units from December 2019.
Madison’s Weekly Softwood Lumber Prices Snapshot: Year-End 2020
Unseasonably strong softwood lumber demand persisted this week as prices on virtually every commodity advanced again.
Madison’s Lumber Reporter would like to wish all our wonderful subscribers and contacts a very safe and Happy Holiday Season, we will be back in January with the latest updates!
#sawmill #softwood #lumber #ushousing #housing #building #construction #wood
US Housing Starts & Softwood Lumber Prices: November and December 2020
US Housing Total Starts November 2020 & Benchmark Softwood Lumber Prices December 2020
At a completely unusual time of year, US housing starts for November 2020 increased — for the third straight month even. Residential starts rose +1.2% to a 1.55 million annualized rate from a downwardly revised 1.528 million a month earlier. Single-family starts, which use much more wood than multi-family and are the largest share of the housing market, rose for a seventh month to a 1.19 million annualized rate, or +0.4%, the highest rate since 2007. Starts for projects with five or more units, a category that tends to be volatile and includes apartments and condos, increased to 352,000.
Relentless unseasonably strong demand pushed lumber prices even higher, for the week ending December 11, 2020 the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr rose another +$92, or +14%, over the previous week to US$744 mfbm, said Madison’s Lumber Reporter. Last week’s price is +$154, or +26%, more than it was one month ago. Compared to one year ago, this price is up +$350, or +89%.
The USA purchases approximately 65% of Canada’s dimension lumber production mostly for home construction framing, while Canadian buyers account for about 10%, and those in Japan take 6%.
* Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS
December 11, 2020 “Softwood lumber prices continued to rocket upwards last week amid acute supply shortages.” — Madison’s Lumber Reporter
US Housing 1-Unit Starts November 2020 & Benchmark Softwood Lumber Prices December 2020
Most important for the North America softwood lumber industry, single-family building permits in the US jumped +1.3% to a rate of 1.143 million units in November. Homebuilding is being driven by lean inventories, especially for previously owned homes. Indeed, that backlog continues to grow, with the number of single-family homes permitted but not started construction up +16.3% from November 2019 to November 2020, as building material delays and higher costs hold back construction.
Western S-P-F softwood lumber purveyors in the US reported another gangbusters week of sales as scores of buyers jumped into the fray, capitulating to the strong, upward trajectory of demand. With Canadian producers selling out domestically every day, primary and secondary suppliers in the US were under siege from desperate customers whose hand-to-mouth strategies have ensured perpetually-light inventories.
Canadian Western S-P-F lumber producers, meanwhile, continued selling out like crazy every day, leaving not a speck of fibre for the US market. Sawmill order files were to the first week of January and fully expected to move further this week. Producers in BC reported log supply was becoming a real problem in that province’s Interior. Any heretofore freezing weather events were short-lived and on balance the climate has been so mild thus far this season that harvesting and hauling crews simply can’t access and convey enough raw logs.
Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr Prices: Nov 2020
As for the East, sawmills in Eastern Canada — specifically Quebec — are already on their yearly seasonal break, and those in the West are not far behind with curtailments and closures. Usually at this time of year construction activity is down to almost nothing, and lumber producers are spending their time doing year-end accounts and taking inventory.
In order to be in a good position for tax reporting, sawmills want to empty their yards of manufactured wood products before year-end. Also they want to have their log yards stacked as full as possible. Because demand has been so consistently strong, which is very unusual for December, lumber suppliers have been quoting wood sales into January 2021. This with the accompanying increase in prices, of course. Customers, while reluctant, can do nothing but accept the higher price lists because none have been stocking inventory and there continues to be rush of real building projects to serve.
Forest industry expectations, therefore, are that current softwood lumber price increases will remain through the Holidays and into the beginning of January.
The above table is a comparison of recent highs, in June 2018, and current December 2020 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of Sept 2015:
Historically High Plywood Prices Comparison: Graph
Canadian Softwood Plywood 9.5mm (3/8″) TORONTO Prices: 1999 compared to 2003 and 2020
Food for thought …. the historical high Plywood prices of 1999 were briefly eclipsed in 2003 due to rebuilding after the devastation of Hurricane Andrew in the US.
Year-end 2020 Plywood prices have surpassed even the boggling highs of 2003.
Will upward price pressure maintain? New data coming out in 2021 will let us know.
Only time will tell! Subscribe to Madison’s Lumber Reporter today and receive this vital softwood lumber and panel price information on-time Friday mornings every week.
Unrelenting Strong Demand Sends Softwood Lumber Prices Higher to End 2020
This week marks the normal seasonal end to softwood lumber manufacturing across most of North America annually.
Sawmills in Eastern Canada, specifically Quebec, are already on their yearly seasonal break, and those in the West are not far behind with curtailments and closures, according to Madison’s Lumber Reporter. Usually at this time of year construction activity is down to almost nothing, and lumber producers are spending their time doing year-end accounts and taking inventory.
In order to be in a good position for tax reporting, sawmills want to empty their yards of manufactured wood products before year-end. Also they want to have their log yards stacked as full as possible. Because demand has been so consistently strong, which is very unusual for December, lumber suppliers have been quoting wood sales into January 2021. This with the accompanying increase in prices, of course. Customers, while reluctant, can do nothing but accept the higher price lists because none have been stocking inventory and there continues to be rush of real building projects to serve.
Industry expectations, therefore, are that current price increases will remain through the Holidays and into the beginning of January.
“Prices continued to rocket upwards last week amid acute supply shortages.” — Madison’s Lumber Reporter
Western S-P-F purveyors in the US reported another gangbusters week as scores of buyers jumped into the fray, capitulating to the strong, upward trajectory of demand. With Canadian producers selling out at home every day, primary and secondary suppliers in the US were under siege from desperate customers whose hand-to-mouth strategies have ensured perpetually-light inventories. Sawmills pushed their prices up on every conceivable commodity, thus most order files stretched into the first week of January.
Canadian Western S-P-F producers continued selling out like crazy every day, leaving not a speck of fibre for the US market. Sawmill order files were to the first week of January and fully expected to move further this week. Producers in BC reported log supply was becoming a real problem in that province’s Interior. Any heretofore freezing weather events were short-lived and on balance the climate has been so mild thus far that harvesting and hauling crews simply can’t access and convey enough raw logs.
Relentless unseasonably strong demand pushed prices even higher, for the week ending December 11, 2020 the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr rose another +$92, or +14%, over the previous week to US$744 mfbm, said Madison’s Lumber Reporter. Last week’s price is +$154, or +26%, more than it was one month ago. Compared to one year ago, this price is up +$350, or +89%.
“The frenzy of panic-buying of Eastern S-P-F lumber and studs was alive and well last week as prices skyrocketed ever further. Buyers continued to deal only in small volumes, partly due to their reticence to cover anything more than immediate needs and partly due to a persistent lack of overall supply. For their part, sawmills couldn’t keep production even close to apace with demand, as winter weather affected operations and surging coronavirus cases caused staff shortages or even temporary shutdowns. Sawmill order files were almost ubiquitously into the New Year 2021 as buyers desperately scrambled to plug holes in their empty inventories.” — Madison’s Lumber Reporter
Compared to the 1-year rolling average price of US$554 mfbm, last week benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was selling for +$190, or +34% more, and was up +$282, or +61%, compared to the 2-year rolling average price of US$462 mfbm.
The above table is a comparison of recent highs, in June 2018, and current December 2020 benchmark dimension Softwood Lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of Sept 2015:
Madison’s Heating Wood Pellet Prices report: November 2020
New Funding for Alberta Biomass Fuel Projects, Global Biomass Capacity to Grow by 16%
Alberta Announces $150 Million in Funding for Emission-Cutting Projects
The Government of Alberta announced in early November it will provide $100 million in funding for Emissions Reduction Alberta’s (ERA) Shovel-Ready Challenge through the Technology Innovation and Emissions Reduction fund.
An additional $50 million will also be available from the federal Low Carbon Economy Leadership Fund. Successful applicants are eligible for up to $15 million, and projects receiving funding must begin within 60 days of being approved and must include commercial demonstration or deployment of technologies in operational environments. Eligible projects include mobility and transportation solutions, low-emission electricity generation, high-efficiency equipment, optimization of agriculture and forestry operations, methane emissions management, waste heat utilization, low carbon industrial heat, fuel switching, alternative feedstocks, carbon capture, utilization, and sequestration, and more.
The application deadline is Tuesday, December 22nd, 2020.
Bioenergy Usage Expected to Grow: IEA
In a report released in early November the International Energy Agency (IEA) detailed the growing role of bioenergy in energy production worldwide. The IEA Renewables 2020 report showed that global biomass electricity production grew by 8.5 GW in 2019, making 2019 the second-highest increase on record. China accounted for the largest proportion – 60 per cent – of new biomass capacity in 2019, mostly in the form of energy-from-waste projects. Japan was second in new biomass capacity at one-tenth the size of the Chinese market.
The report forecasts a decline of 16 per cent in bioenergy capacity additions in 2020 due to ongoing effects from the COVID-19 pandemic. Ten nations accounted for 90 per cent of major deployments of biomass power projects in 2019, and the largest markets – China, Brazil, Japan, and the United Kingdom – have been severely affected by the pandemic. Delays in biomass project delivery have already occurred in those countries and are expected to continue. At the feedstock level, widespread supply disruptions of biomass fuels for existing projects have not been observed according to the report.
