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It was this same week last year when lumber prices reached an unimaginable all-time high, and stayed that way for a few short weeks before falling consistently through summer to almost meet the lows of 2019.
As mentioned last week, this year prices are topping-out lower, and are bottoming-out higher.

As industry and customers are realizing the “new normal” price levels in this post-Covid19 world, it seems that the incredible volatility of the past two years is behind us. In the past, this would be the time of year that lumber prices start to soften, as the major home builders and retailers would have made their largest-volume purchases for the coming building season.
Whether that previously “normal” seasonality will come into play this year remains to be seen.
Regardless, it is generally acknowledged that those extreme highs of last year will probably not return, and customers can expect more regular price swings going forward.

Dropping somewhat after weeks of staying flat, for the week ending May 13, 2022 the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$1,070 mfbm, down -$40, or -4%, from the previous week when it was $1,110, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter. That week’s price is down by -$16, or -1% from one month ago when it was $1,086.

Field inventories were thin across the board even as construction markets revved up to finish jobs before interest rates rise in the coming months.

North American lumber prices flattened out as a pensive tone permeated business in most respects.”

— Madison’s Lumber Reporter

A weakening Futures board sent many US buyers of Western S-P-F  lumber and studs to the sidelines. Those who were active found sawmill lists wanting. There were significant delays on highly sought-after widths and stud trims thanks to an ongoing lack of transportation equipment. Secondary suppliers continued to offer quicker shipment but at less flexible price points.
Shipping backlogs put sawmill order files into the week of May 30th, indeed pushing into June.

Reported price levels of Western S-P-F dimension commodities were largely flat according to Canadian suppliers. Buyers were intermittently active, yet frustrated with the lack of sawmill offerings. That dearth of availability mostly came from an inability to ship, not from production constraints.
One veteran player noted that some BC sawmills were buying their Futures position back because they couldn’t find rail cars.
On top of ongoing equipment and personnel shortages, fuel surcharges continued their inexorable rise, with British Columbia one of the hardest hit regions in that regard.

It was a challenging week for suppliers and buyers alike of Eastern S-P-F lumber. Production and shipping costs continued to climb as protracted transportation delays disrupted efficiency up and down the supply chain. Retailers and other buyers got even more cautious, only putting in new orders when absolutely necessary and spending much of their time chasing down wood they had already purchased.”

— Madison’s Lumber Reporter

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

When compared to the same week last year, when it was a mind-boggling US$1,640 mfbm, for the week ending May 13, 2022 price of Western Spruce-Pine-Fir 2×4 was down by -$570, or -35%.
Compared to two years’ ago when it was $360, that week’s price is up by +$710, or +197%.

At this time last year lumber prices started their skyrocket to absolutely unprecedented highs, where they stayed for a few weeks then fell way back down to the lows of 2019.
This year those wild swings seem to be getting worked out, with lower highs and higher lows, so it is likely industry has found where the “new normal” is, thus where pricing levels are going to be.

For the first two months this year, softwood lumber production in the US was relatively flat, down by only -1.1% from January – February 2021, says the latest issue of the Western Wood Products Association’s monthly Lumber Track. US lumber production volumes were 5,865 mmfbm compared to the same time last year when it was 5,931 mmfbm.US softwood lumber production was 2,894 mmfbm in February 2022, which is down by -2.6% compared to January’s 2,970 mmfbm.

Last month’s update here: https://madisonsreport.com/2022/04/22/north-america-softwood-lumber-production-sawmill-capacity-utilization-wwpa-january-2022/

Meanwhile in Canada, for January – February 2022 production volumes continued dropping, down by -7.9%, to 3,631 mmfbm, compared to the first two months of 2021 when it was 3,943 mmfbm. Specifically in British Columbia — which accounts for 50% of Canadian lumber manufacturing and sales — sawmill production volumes in January – February decreased by -7%, to 1,447 mmfbm, compared to the same time last year when it was 1,556 mmfbm.

Canada softwood lumber production was 1,817 mmfbm in February 2022, which is basically flat compared to January’s 1,813 mmfbm.

North America Softwood Lumber Production, Sawmill Capacity Utilization, WWPA: February 2022

US sawmill production as a per cent of practical capacity for January-February 2022 was 82%, compared to the first two months of last year when it was 85%, said the Western Wood Products Association’s monthly Lumber Track.

Continuing to struggle, Canada’s sawmill capacity utilization rate for January-February was a quite low 75% compared to the same time last year when it was also low at 83%.

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While many North American construction framing dimension softwood lumber and panel prices stayed flat, others did rise a little bit.
Customers satisfied with recent price drops agreed with current levels, and came back to buy at good volumes.

Inventories in the field seemed to improve, possibly suggesting that near-term demand will ease as end-users are starting to get stocked up on the wood they need for immediate purposes. At this time last year lumber prices started their skyrocket to absolutely unprecedented highs, where they stayed for a few weeks then fell way back down to the lows of 2019.

This year those wild swings seem to be getting worked out, with lower highs and higher lows, so it is likely industry has found where the “new normal” is, thus where pricing levels are going to be.

Check back with the Madison’s website often for the latest softwood lumber prices and market updates.

Generally staying quite level for about a month, for the week ending May 6, 2022 the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$1,110 mfbm, up +$20, or +2%, from the previous week when it was $1,090, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter.
That week’s price is down by -$25, or -2% from one month ago when it was $1,086.

Sawmills maintained two- to three-week order files, not in particularly strong or weak positions according to players.

Steady underlying demand was evident this week even as prices flattened out and sales paused.”

— Madison’s Lumber Reporter

Producers of Western S-P-F  commodities in the United States kept their numbers close to the previous week’s levels as sales took a pause. Most buyers had covered their needs for roughly one- to two-weeks out and stepped back to digest previous orders, and try to figure out where the market was going.

Sales of Canadian Western S-P-F continued to firm up. Prices remained a bit of a mixed bag; with wholesalers and distributers looking to shed some of their inventory, but not nearly as aggressively as in recent weeks. Sales volumes were strong on both sides of the border. 

Suppliers of green Douglas-fir lumber and studs reported good demand as construction activity rumbled further to life in several markets. Players noted that perhaps the most important region, California, was bustling lately.
Sawmill order files were into mid- or late-May.”

— Madison’s Lumber Reporter

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

When compared to the same week last year, when it was US$1,550 mfbm, for the week ending May 6, 2022 price of Western Spruce-Pine-Fir 2×4 was down by -$440, or -28%.
Compared to two years’ ago when it was $354, this week’s price is up by +$756, or +214%.

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Total Construction Spending US:

1Q 2020 – $334 billion
1Q 2021 – $353 billion
1Q 2022 – $370 billion (Up +11% from 2020, Up +39% from 2015)

US Remodelling Activity:

1Q 2020 – $334 billion (same as total construction)
1Q 2021 – $350 billion
1Q 2022 – $391 billion (more than total construction!)

In 1Q 2022 home remodelling value was +17% higher than in 1Q 2020.

The slight lull in buying through March and April brought lumber prices down to levels which made customers comfortable.
A spate of purchasing ensued at the end of April, levelling off prices then bringing them slightly upward.

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Market conditions continued confusing, with quite some variation among suppliers. Those well-stocked with inventory sold handily to waiting customers.

Meanwhile, transportation delays caused yet more consternation with producers and customers both; everyone was spending so much time searching out wood in the supply chain, rather than making actual sales.

Recovering from slight drops the previous two weeks, for the week ending April 29, 2022 the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$1,090 mfbm, up +$30, or +3%, from the previous week when it was $1,060, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter.

That week’s price is down by -$293, or -21% from one month ago when it was $1,383.

The slight lull in buying through March and April brought lumber prices down to levels which made customers comfortable. A spate of purchasing ensued at the end of April, levelling off prices then bringing them slightly upward. Market conditions continued confusing, with quite some variation among suppliers.
Those well-stocked with inventory sold handily to waiting customers.

Meanwhile, transportation delays caused yet more consternation with producers and customers both; everyone was spending so much time searching out wood in the supply chain, rather than making actual sales.

Check back with the Madison’s website often for the latest softwood lumber prices and market updates.

Recovering from slight drops the previous two weeks, for the week ending April 29, 2022 the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$1,090 mfbm, up +$30, or +3%, from the previous week when it was $1,060, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter.
That week’s price is down by -$293, or -21% from one month ago when it was $1,383.

That strong sales activity didn’t go unnoticed by opportunistic customers on the sidelines.

Solid demand persisted in a confusing market this week as most commodity prices hovered around the previous week’s levels, and buyers were unsure whether they should make a move to purchase or wait longer.”

— Madison’s Lumber Reporter

The Western S-P-F market continued to firm up according to players in the United States. Sawmill price lists were thinner and there was less prompt wood available after a strong wave of sales activity the previous week. Producers strengthened their order files, extending most items into the week of May 16th. While the dimension market found further balance, WSPF studs sales were solid to start the week and only got tighter from there.
Suppliers bemoaned ongoing issues in transportation, particularly into and out of Canadian locations.

Demand and sales activity in the Canadian Western S-P-F market evened out to solid levels. Narrow offerings continued to lead the way in terms of sales volumes, and consistent takeaway caused many heretofore vacillating buyers to secure some of their own immediate needs rather than waiting for another round of corrections.
Producers reported sawmill order files into mid- or late-May. 

The week started with a bang in Eastern Canada, as buyers were busy early and sawmill lists were cleaned up quickly. Logistical concerns continued to bedevil every transaction, and calls to suppliers asking, “Where is my order?!” were frequent.

— Madison’s Lumber Reporter

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

When compared to the same week last year, when it was US$1,420 mfbm, for the week ending April 29, 2022 price of Western Spruce-Pine-Fir 2×4 was down by -$330, or -23%.
Compared to two years’ ago when it was $336, this week’s price is up by +$754, or +224%.

We hope you enjoy the very important timely information inside!
This update is related to the fabulous Madison’s Lumber Directory, currently available with our good friends at Lumber Blue Book.

Your trusted source for weekly softwood lumber prices and market updates, Madison’s Lumber Reporter, has launched something new: the monthly Madison’s Sawmill Curtailment Lookout. As a new product, we will be sending this complimentary until June.

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For the moment it seemed the North American construction framing dimension softwood lumber market found a supply-demand balance, as the benchmark price drops slightly but many others remain flat.

In the week following Easter, which is a big-deal holiday in Canada, sawmills and wholesalers seemed to find good price levels which attracted back customers who may have been waiting to book purchases. Suppliers reported robust sales on continued plump inventories, while buyer enthusiasm pushed sawmill order files into early May.
Good spring weather brought increased construction activity in many markets across the US, while Canada had quite a bought of cold weather and snow. This will melt quickly though, and building will soon move into high gear across Canada as well.

Check back with the Madison’s Lumber Reporter website often for the latest softwood lumber prices and market updates.

Dropping slightly from the previous week, for the week ending April 22, 2022 the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$1,060 mfbm, down -$36, or -3%, from the previous week when it was $1,096, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter.
That week’s price is down by -$323, or -23% from one month ago when it was $1,383.

Both lumber and panel prices appeared to have turned a corner, establishing a tentative bottom.

Price drops stabilized around midweek, turning the following week into an important litmus test as to the sustainability of this reversal.”

— Madison’s Lumber Reporter

The lumber market at large balanced out noticeably according to Western S-P-F traders in the United States. As construction activity in most regions of the country came further to life thanks to burgeoning spring weather, buyers felt pressure to shore up their depleted inventories into May and beyond. 
Early-May order files were commonly reported by sawmills.

Western S-P-F purveyors in Canada came back from the Easter long weekend to a much more active market following the Easter holiday weekend. The more balanced tone convinced many buyers that it was time to get down off the fence and secure some coverage.
Sawmills still showed decent volumes on their lists, but steep counters appeared to be a thing of the past. And while secondaries continued to sell below-replacement, those numbers were closer to mill levels than they have been weeks.
Players reported difficulties with reaching remote field locations and covering rising freight rates.

“Buyers of Eastern S-P-F sheet goods had ample volume to cover to keep ahead of burgeoning construction markets. Prices continued to be elusive due to variation between mills and distributors, surging freight rates, and myriad counter-offers still coming from buyers.
Panel dealers in Western Canada welcomed a tangibly busier week as the end of April approached. OSB prices appeared to hit a bottom early on and players navigated another tricky week of trading. Plywood numbers were hard to pin down.”

— Madison’s Lumber Reporter

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

When compared to the same week last year, when it was $1,330, for the week ending April 22, 2022 the price of Western Spruce-Pine-Fir 2×4 is down by -$270, or -20%.
Compared to two years’ ago when it was US$336 mfbm, this price is up by +$724, or +215%.