Despite somewhat soft demand, as many customers weren’t sure where prices
were going so waited to buy, lumber prices popped up again in mid-February.
This due mostly to ongoing capacity restrictions, especially in the
important timber supply basket of British Columbia. As the spring building
season fast approaches, end-users will not be able to wait much longer to
order the wood necessary for upcoming building projects. Especially given
that delivery times remain quite extended — currently a minimum of six
weeks. Inventories in the field are tight, as secondary suppliers also held
off buying to see if prices might drop. Or flatten. At the current level,
the benchmark commodity item, Western S-P-F 2×4, price is hovering at just
below the recognized average cost-of-production of US$500 mfbm.
In the week ending February 10, the price of benchmark softwood lumber item
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$476 mfbm, which is up by
$16 or 3.0 per cent, from the previous week when it was US$360 mfbm. This is
up by $104, or 28 per cent, from one month ago when it was $373.
Supply levels remained tight due to the significant reduction in production
volume caused by the aforementioned mill changes.
“Prices of panels appeared to find a bottom, while the recent climb in
lumber and stud prices tapered off to stable-but-firm levels.” — Madison’s
Lumber Reporter
The Western S-P-F market in the United States experienced balance after a
period of solid business activity generated by Western producer curtailment
and closure announcements. Sawmill order files extended into late-February
or early-March, reflecting producers’ cautiously optimistic confidence. On
the other hand, buyers took a step back after shoring up their inventories
in January, waiting for the market to show a clear direction.
Demand for Western S-P-F in Canada slowed down to a more stable pace with
commodity prices settling at or slightly above the previous week’s levels.
In reaction to the myriad curtailment and closure announcements over the
past five weeks, most buyers had already extended their coverage, choosing
to digest their positions for the time being. Availability of prompt supply
was limited, even as the odd load popped up before quickly getting snatched.
Two- to four-week order files were most common as producers solidified their
positions for the balance of February.
“The U.S. Northeast witnessed unseasonable weather conditions, leading
Eastern wholesalers to speculate that the spring season may not be as
favourable as anticipated. This resulted in a decline in sales and a
reluctance among buyers to build up their inventory for the upcoming
building season. Additionally, inventory holders were cautious about paying
more for carloads, given the lengthy transportation time of approximately
six weeks.” — Madison’s Lumber Reporter
Compared to the same week last year, when it was US$1,220 mfbm, the price of
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending February 10,
2023 this price was down by $744, or 61 per cent. Compared to two years ago
when it was $960, that week’s price is down by $484, or 50 per cent.
More Reports:
