Ongoing soft demand keeps lumber prices stable: Madison’s
May 16, 2023 By Madison’s Lumber Reporter
May dawned to witness no particular increase in lumber demand. Supply remained good as sawmills had plenty of inventory on hand. Customer inquiries did improve, as is normal for the time of year, but was still along the levels of the past winter. Players wondered when ever would the spring construction season materialize for 2023.
In response to the weak market conditions, another producer announced a round of curtailments at manufacturing facilities, again in British Columbia. This to prevent lumber commodity prices from falling even further, as they are currently dangerously at or below cost-of-production.
In the week ending May 05, 2023, the price of Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$360 mfbm, which is flat from the previous week. That week’s price is up by $9, or two per cent, from one month ago when it was $351.
Substantial discounts for material beyond a two-week timeline were not considered as producers waited to see if they could firm up their numbers over the course of May.
“The overall pace of business remained lacklustre considering the time of year, yet traders remained optimistic about more sales to come.” — Madison’s Lumber Reporter
Real springtime sales activity remained elusive again according to Western S-P-F traders in the United States. There was apparently still too much supply chasing too little demand. Some players contrastingly reported sneaky-good business in their respective regions, with a fair bit of day-to-day truck orders coming in. While demand levels seemed boring, by day’s end the number of overall deals stacked up to decent numbers. A prevailing sentiment was that 2×4 #2&Btr R/L was undervalued no matter the source. Meanwhile, #3/Utility 2×4 was much more difficult to buy and easier to sell. Traders saw studs as the most liquid items. Sawmill order files were in the realm of two weeks.
Caution continued to reign in the Western S-P-F lumber market to hear Canadian suppliers tell it. Players were optimistic overall, but the pace of business remained well below typical springtime levels. Buyers still subsisted on hand-to-mouth deals. Even as they kept to short-covering, customers reported increased jobsite activity and retail traffic. Western Canadian sawmills adjusted their asking prices on bread-and-butter items within a narrow range, trying to find tradable levels that stuck. Transportation continued to flow smoothly and on time for the most part, further reducing urgency on the part of buyers.
“Sellers of green Douglas-fir lumber and studs in the United States reported another grind of a week. Inquiry was out there, but securing actual orders was a challenge according to suppliers. Wholesalers and distributers were busier than sawmills as buyers continued to favour highly-specified mixes and LTL orders that could be shipped in 10 days or less. Meanwhile, producers worked to build up their meagre log decks as soggy forestland dried out, anticipating improved demand in the back half of May. Sawmill order files were largely into the second or third week of May.” — Madison’s Lumber Reporter
Compared to the same week last year, when it was US$1,060 mfbm, the price of Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending May 05, 2023 was down by $700, or 66 per cent. Compared to two years ago when it was $1,210, that week’s price is down by $850, or 70 per cent.
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