U.S. lumber prices soar, creating huge uncertainties
By Wood Markets
Feb. 22, 2017 - The U.S. lumber markets are already seeing some major price volatility, where W-SPF lumber prices soared by a whopping 25 per cent (US$78/Mbf) in the three-week period between Jan. 27 and Feb. 17, 2017 and up US$83/Mbf over the previous five-week period.
This three-week price increase in U.S. lumber prices is one of the largest short-term gains over the past 20 years. This is mirroring a similar scenario back in early 2001 when countervailing duties (CVD) on Canadian lumber shipments into the U.S. moved into their 90-day retroactive period in mid-May 2001 and the anti-dumping duties (ADD) followed later. The initial combined duties of 32.3 per cent were both in effect in November 2001.
The largest U.S. lumber price spike ever, based on price changes in consecutive weeks, was in 2001 – before the implementation of the last U.S. duties – when lumber prices spiked higher by US$165/Mbf over a 7-week period. This was followed by two major price collapses over the next six months: one over five weeks for a drop of US$111/Mbf; and a second over 9 weeks for US$122/Mbf (details are provided in this month’s WOOD Markets Monthly Report). Understanding the possible scenarios and implications of U.S. export duties on Canadian lumber shipments to the U.S., before and after duties are implemented, are critical factors to consider and understand for all players throughout the lumber supply chain.