Wood Business

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Limited supply sends softwood lumber prices higher


November 2, 2021
By Madison's Lumber Reporter

Once again for a very unusual time of year, softwood lumber prices firmed up yet more in late October. Sales volumes were encouraging, especially for the time of year, as sawmills extended order files out four weeks. Based on the regular historical seasonal cycle, it is not normal for lumber prices to be increasing in autumn. However, this was the case last year. As seen by the graphs attached, the price of benchmark softwood lumber commodity Western S-P-F 2×4 is closely following the trend of last year.

Showing surprising strength in ongoing increases when usually lumber prices are dropping, in the week ending October 22, 2021, the price of Western S-P-F 2×4 #2&Btr KD (RL) was US$630 mfbm, which is up by a remarkable +$35, or +6%, from the previous week when it was $595. This price is up by +$142, or +29%, from one month ago when it was $488.

Buyers of Western S-P-F in the United States continued to run up against palpably limited availability.

“Softwood lumber producers and distributers alike related increasing problems with logistics.” — Madison’s Lumber Reporter

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On the supply side, Western S-P-F sawmill production volumes in the U.S. weren’t enough to keep up with construction-related consumption so far in autumn. Secondaries fielded tons of inquiry this week too as buyers searched high and low for amenable combinations of pricing and shipping times..

Canadian suppliers of Western S-P-F were busy this week with reportedly relentless demand. Sawmill order files were well into November. Lack of labour and equipment caused delays up and down the supply chain.

“Demand for Eastern S-P-F plywood stalled out again. Some flooring stock experienced good demand, but field inventories of most grades and thicknesses were ample and buyers exhibited zero urgency. Western S-P-F plywood demand was unchanged, as mills were selling week-to-week. ” — Madison’s Lumber Reporter

Madison’s benchmark top-six softwood lumber and panel prices: monthly averages

Unbelievably, after mid-October 2021, lumber prices kept pushing up. When compared to the same week last year, when it was $700, the price of Western S-P-F 2×4 is down by -$70, or -10%. Compared to two years’ ago when it was $378, this price is up by +$252, or +67%.