In an effort to make timber prices more responsive to market conditions, the latest changes to BC Timber Sales stumpage rates has that calculation based on recent lumber prices. As these changes start to take hold, the relationship between softwood lumber prices and log prices will become even more apparent.
Madison’s Monthly Lumber and Forestry Data Table
As true winter weather came on across the continent, total residential starts in the US for January 2021 fell by -6% to a 1.58 million annualized rate. Permits for future homebuilding soared again, this time by +10.4% to a rate of 1.881 million units, in January. January starts of single-family housing, the largest share of the market and construction which uses the most wood, reversed last months climb almost exactly, falling by -12% to a 1.16 million pace. Single-family building permits, meanwhile, rose by +3.8% to a rate of 1.27 million units in January.
Sharply increased homebuilding activity is being supported by lean inventories, especially for previously owned homes.
In the week ending February 12, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr rose another +$32, or +3%, to US$992 mfbm, from $960 the previous week, said Madison’s Lumber Reporter.
Last week’s price is +$66, or +7%, more than it was one month ago when it was $926. 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$992 mfbm which is +590, or +147% more.