Softwood lumber prices slowly recover from recent lows: May 2019
May 14, 2019 By Madison's Lumber Reporter
Some wholesaler (net FOB sawmill) standard construction framing dimension softwood lumber prices rebounded slightly last week from recent lows, while most prices remained flat from the end of April. While reasonable amounts of wood are being traded, demand could hardly be regarded as lush. Sellers, whether producers or secondary suppliers, had plenty of lumber commodity items on hand — and access to increased supply if necessary — but customers were just not coming to the table with significant buys. As a result, sawmill order files remained at barely two weeks. This would be much less if several large manufacturers had not curtailed significant production and announced future curtailments and looming closures for this summer.
This very week, more sawmill closures were announced, this time by Tolko Industries. That company revealed Monday that it will permanently close its Quesnel, B.C., sawmill and will reduce shifts at its Kelowna, B.C., mill.
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 U.S. home builder’s current lumber buying activity
These sawmill capacity reductions and removals will improve both the log supply and lumber price situation for Pacific Northwest sawmills.
For the week ending May 10, 2019, Western Spruce-Pine-Fir KD 2×4 #2&Btr (RL) FOB sawmill wholesaler prices were U.S. $332 mfbm, unchanged from the previous week. This week’s price was down -$16, or -5%, less than it was one month ago. Compared to one year ago, prices are down -$286, or -46%.
Dimension Western Spruce-Pine-Fir trading proceeded at a meandering pace; plywood prices appeared to finally hit a bottom. — Madison’s Lumber Reporter
Speaking of sawmill capacity, the latest issue of Lumber Track, published monthly by the Western Wood Products Association, shows sawmill capacity utilization in the U.S. fell slightly while that in Canada tanked by a large amount compared to the same time last week. Sawmill production as per cent of practical capacity in the U.S. for February was 86%, down 1% from February 2018.
However, in Canada, there is a sharp drop. Canadian sawmills operated at 78% of total capacity in February 2019, down a full 9% from 87% capacity in February last year.
Traders of kiln-dried Douglas fir lumber described selling spruce as “a crap market,” while demand for Doug fir was “good and strong,” by comparison. — Madison’s Lumber Reporter
The below table is a comparison of recent highs, in June 2018, and current May 2019 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05 and compared to recent lows of Sept. 2015:
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