As December dawned winter weather came on across North America, causing the
usual drop in construction activity, thus lumber sales. Price levels dropped
accordingly, but only for benchmark items. Sellers were able to keep prices
level on many dimension lumber and panel items.
However, the obvious slowing demand into the end of the year suggested
further price drops to come. Producers responded by cutting production,
which is normal for year-end. This year several large sawmill operators are
curtailing a bit earlier than usual, taking more production volumes offline
than in the past couple of years. This is a good response to market
conditions, because it will keep supply better in line with seasonal
dropping demand thus keep prices from falling much further.
In the week ending December 2, the price of benchmark softwood lumber item
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$400 mfbm, which is down by
$75 or 16 per cent. This is down by $86, or 18 per cent, from one month ago
when it was $486.
Demand for North American lumber cooled off in concert with falling
temperatures.
“
Producers in Western Canada did their best to keep prices flat from the
previous week, dropping lovels in the double-digit range on only a few
bread-and-butter narrow R/L items.” — Madison’s Lumber Reporter
Amid persistently negative economic indicators and a potential nationwide
rail strike, Western S-P-F purveyors in the U.S. reported decent sales as
enough buyers were scrambling to find last-minute coverage. For their part,
producers in the West were gearing up for holiday shutdowns, showing thinner
lists with each passing day. Sawmill order files were around two weeks out.
Prices of low-grade offerings were notably firmer than #2&Btr.
Sales activity of Western S-P-F lumber was lacklustre, said Canadian
suppliers. Sawmill offer lists weren’t exactly ample, but the level of
demand was even lower. Shipments continued to move with relative ease,
especially considering the latest spate of winter weather across much of the
West. There was a marked nervousness regarding trucking and rail delivery
times, however.
“
The outlook in the Kiln-Dried Douglas-fir commodities market remained
despondent according to traders in the U.S. As a few trims stayed at or
below green fir stud numbers, some producers were considering downtime to
even out the supply-demand balance and stanch the bleeding of prices
dropping. Inventories of wider dimension items remained tight as
increasingly severe winter weather restricted access to bigger logs. Sawmill
order files were into the week of December 12th. Most suppliers reported
minimal transportation disruptions, a welcome and unexpected development for
this time of year. ” — Madison’s Lumber Reporter
Compared to the same week last year, when it was US$710 mfbm, the price of
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending December 2,
was down by $310, or 44 per cent. Compared to two years ago when it was
$652, that week’s price is down by $252, or 39 per cent.
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