Wood Business

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Softwood lumber prices continue dropping, US housing data troubling


April 23, 2019
By Madison's Lumber Reporter

The latest data of U.S. new housing starts and of home sales for March 2019 is not encouraging. At a time of year when wood sales would normally be hot, this housing market softness is doing nothing to improve already dropping North America construction framing softwood lumber prices. Last week, Canadian sawmills and companies were closed Friday for usual observance of the Easter. The compressed week did not provide a boost to sales, however, with demand significantly lower than it usually is for the season. Be ahead of these data releases! Don’t delay, this week’s softwood lumber market comment was published to the website Monday morning.

* Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity

Noticing that lower grade prices were less soft than standard grade, many producers of Western Spruce-Pine-Fir lumber switched from running #2&Btr to the utility grades. This kind of production juggling, as well as maintenance breaks or other kinds of mini-curtailment, is how sawmill order files remain longer than one week. Claims of even that duration could be taken with skepticism.

For the week ending April 19, 2019, Western Spruce-Pine-Fir KD 2×4 #2&Btr (RL) FOB sawmill wholesaler prices averaged U.S.$336 mfbm, a decrease of -$12, or -3.5%, from the previous week. This week’s price is -$66, or -16%, less than it was one month ago. Compared to one year ago, prices are down -$220, or -40%.

Players continued to wait with bated breath for spring demand to issue forth. — Madison’s Lumber Reporter

In the Pacific Northwest, kiln-dried Douglas-fir lumber purveyors couldn’t believe that they were still waiting for a wave of demand associated with spring construction to occur. Secondary suppliers found some success from day-to-day, but only by selling below sawmill-replacement levels — which all slid another $5 or so themselves. For their part, KD fir producers were in tough when it came to log supply. While low volumes of incoming fibre reduced pressure to sell at increasingly deeper discounts, log quality and especially pricing put them in a definitive pickle.

Finding buyers for many products, from dimension to studs to low grade, was “a struggle” last week. — Madison’s Lumber Reporter

The below table is a comparison of recent highs, in June 2018, and current April 2019 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of Sept. 2015: