This year ended with lumber prices wavering around what can be considered
the “new normal”. The unprecedented volatility of the previous two years
does seem to be behind us. For the second half of 2022, the price of
benchmark softwood lumber item Western Spruce-Pine-Fir KD 2×4 #2&Btr ranged
between US$630 and US$390 mfbm, providing an indication of where the future
seasonal price cycle will be. No one thought that these prices would stay at
the incredible high of US$1,600 mfbm in spring 2021; however folks should be
aware that the previous 10-year low of US$200 mfbm is equally unlikely. This
is because cost-of-production has changed completely, essentially doubling,
across the continent.
In the week ending December 15, 2022, the price of benchmark softwood lumber
item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$390 mfbm, which is
flat from the previous week. This is down by $96, or 20 per cent, from one
month ago when it was $486.
An embargo by CN Rail in the Vancouver, B.C., region has apparently resulted
in major service delays, putting more pressure on trucking availability. For
now, low transit volumes helped to downplay this development’s effect on the
transportation sector.
“
Suppliers and buyers alike quietly wound down their activity as the
Christmas holiday break approached.” — Madison’s Lumber Reporter
Demand for Western S-P-F commodities in the United States closed out the
year not with a bang, but with a whimper. Buyers remained silent, electing
to ride their lean inventories into 2023, making virtually no participation.
Most prices stayed at the previous week’s levels, with a couple more
commonly-traded items hovering on either side of up-or-down. Producers noted
dampened inquiry and continued to gear down operations ahead of scheduled
shutdowns for the holiday break. Reports indicated sawmill order files
anywhere from prompt to the week of January 2nd.
The curtailment announcement from a large B.C. producer the previous week
generated no momentum of Western S-P-F sales. Buyers sat on their hands,
barely even bothering to short-cover amid languishing demand and deepening
winter weather. Sawmills held most of their asking prices static, with a few
R/L bread-and-butter narrows trading on either side of last week’s levels.
With the majority of buyers fixing to close out the year with
nearly-depleted inventories, many suppliers expressed optimism that 2023
will start off strong. Time will tell. Meanwhile, producers did some
housekeeping to prepare for holiday shutdowns, with offer lists getting
slimmer by the day.
“
Demand for Western S-P-F studs dragged along according to suppliers in
Western Canada. Buyers remained cautious, feeling no pressure to cover any
more than short-term needs despite their depleted inventories. For their
part, producers held their asking prices at the previous week’s levels as
they continued to wind down operations in advance of the approaching Holiday
break. Prompt offerings on more plentiful trims like 2×4- and 2×6-8’s were
slim, but demand was correspondingly slow. Stud mill order files on tighter
items such as 2×4- and 2×6-9’s were up to three weeks out. ” — Madison’s
Lumber Reporter
Compared to the same week last year, when it was US$950 mfbm, the price of
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending December 16,
was down by $560, or 59 per cent. Compared to two years ago when it was
$874, that week’s price is down by $484, or 55 per cent.
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