Industry News Markets
Prices of softwood lumber products surpass seemingly impossible highs

Madison’s is running out of adjectives to describe these non-stop increasing lumber prices. Customers who regularly make large-volume lumber purchases remain underbought and can no longer delay booking orders, as they wait in hopes that prices will go down. Supply continues to be incredibly scarce. U.S. housing starts data for March 2021 has been released; activity is up significantly compared to one year ago. Indeed, permits for total housing starts are up +30% while permits for single-family starts are up +36%. This indicates there is significant upside yet to demand as home construction activity is continuing to increase.

It is a very dry spring in British Columbia and at time of writing there is a wildfire burning in the area of Merritt, in the central-interior. The forecast is for rain in a few days; currently there is concern that a long, dry summer could pose real problems to log supply.

“Once again ‘all hell broke loose’ in the market as prices soared and buyers frantically searched for coverage.” — Madison’s Lumber Reporter

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Buyers of Western S-P-F lumber and studs in the United States continued to understandably agonize over every transaction; only to either pull the trigger or to find that they lost the deal while they vacillated. The pace of sales advanced again along with prices, and there was a general scramble as customers chased down every lead in existence to furnish their depleted inventories. Order files at sawmills pushed into early May or further depending on the item and the source.

The upward price trend in Western S-P-F persisted according to Canadian producers as the market got nuttier with each passing day. The severe supply crunch tightened even further with large swathes of Canadian buyers waking up as good building weather spread across the Great White North. Sawmill order files were extended into mid-May, while rail car availability remained sub-optimal, but improving.

Continuing to surpass any level previously considered normal, in the week ending April 16, 2021, the wholesaler price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr was US$1,210 mfbm. This is up by +$80, or +7%, from the previous week.

That week’s price is up by +$170, or +16%, from one month ago when it was $1,040.

“Purveyors of Southern Yellow Pine commodities related a re-strengthening of demand. Availability dried up across the board and sawmills ceased taking the wide range of counter-offers they had been entertaining through the first half of April.” — Madison’s Lumber Reporter

Compared to the price one-year-ago, when it was US$316 mfbm, for the week ending April 16, 2021, that price is up by +$894, or +283%. Compared to two years ago when it was $336, that week’s price is up by +$874, or +260%.