Industry News Markets
Softwood lumber prices surpass historical threshold

Last week, North America construction framing dimension softwood lumber prices surpassed a threshold that industry veterans never imagined, in their wildest dreams, they would ever see. Weekly price guide newsletter Madison’s Lumber Reporter pegged the wholesaler sales prices on benchmark softwood lumber commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr at US$1,012 mfbm. As mentioned at the end of last year, market conditions for softwood lumber — and indeed all building materials — have been indecipherable. Into February 2021, the momentum of U.S. home sales and house prices continue upward unabated, driving building materials costs higher right alongside.

Most of the continent is still in deep winter weather; however, the major home builders, retailers, and lumber resellers are already making orders for the coming construction season this spring. Expectations are for a very hot real estate market, making the projection for near- to mid-term lumber prices also quite strong.

“As snow piled deep across the continent lumber demand remained strong.” — Madison’s Lumber Reporter

Advertisement

Western S-P-F lumber and studs trading in the United States slowed considerably as cold snaps hit much of the continent late the previous week and early in the current week. With construction activity impacted by the frigid climate, buyers of studs particularly took a step back to assess their positions and hope for a price correction.

As snow flurries socked in many key markets, Western S-P-F producers in Canada related strong but low-key inquiry and follow-through. Benchmark item 2×4 R/L #2&Btr broke the $1,000 barrier, rising $20 to US$1,012 mfbm. Sawmill order files stretched into mid-March, with two weeks typically added to that timeline for delivery.

To the astonishment of all, in the week ending Feb. 19, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr climbed +$20, or +3%, to US$1,012 mfbm, from $992 the previous week. Last week’s price is +$56, or +6%, more than one month ago when it was $926.

“Southern Yellow Pine producers were largely off the market as winter weather lashed most of the southern portion of the United States. Sales activity was subdued by the cold snap, but the market remained vastly undersupplied.” — Madison’s Lumber Reporter

Compared to the price one-year-ago, of US$440 mfbm, last week benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was selling for US$1,012 mfbm which is +572, or +130% more.