At the end of February, despite a noticeable reduction in lumber
manufacturing since Q4 2022, supply was ample enough that prices dropped
significantly. A fresh round of harsh winter weather, including in southern
California, brought a stop to any construction activity that might still
have been going on.
Noting the recent waffling of price levels, wary customers sat on their
hands and delayed buying anything more than absolutely necessary. This in
hopes that prices might fall further. For their part, producers and
wholesalers kept their minds on the looming spring building season. There
remain many unknowns to play out as this year rolls on. If the past three
years have demonstrated anything, it’s that the previous normal annual cycle
of home building, thus lumber price trends, have not been as apparent as
they were historically.
In the week ending February 24, the price of Western Spruce-Pine-Fir 2×4 #2&Btr
KD (RL) was US$417 mfbm, which is down by $53, or 11 per cent, from the
previous week when it was $470. That week’s price is up by $45, or 12 per
cent, from one month ago when it was $373.
Construction markets consuming only dribs and drabs of framing components,
thus downstream business remained subdued.
"North American lumber demand was restrained overall, with prices of many
key commodity prices tumbling amid persistently weak demand." — Madison's
Lumber Reporter
Suppliers of Western S-P-F commodities in the United States reported a
restrained tone among buyers. Negativity on the futures board gave customers
further pause, relegating the bulk of business to the distribution network.
Even secondary suppliers, however, were underworked; as the only sales they
saw came in highly mixed truckloads from cautious buyers looking to fill the
odd hole in their inventories. Warehousing and storage rates have risen
dramatically compared to pre-COVID levels, causing wholesalers and
distributers to bemoan the heightened cost of carrying wood. Mid-March
sawmill order files were widely reported.
A prevalent downward trend emerged in Western S-P-F trading. Sawmills made
significant adjustments to their asking prices, particularly on standard-
and high-grade dimension items. Buyers continued to sit on the sidelines,
waiting for wood already ordered to arrive or working through their own
ample inventories. Conifex announced plans to temporarily curtail operations
at its Mackenzie, B.C., sawmill. Unsustainable inventory levels caused by
rail transportation issues in Interior B.C. apparently necessitated the
move, which will reduce that mill’s production capacity by an estimated 7
million board feet.
“Demand for Western S-P-F studs went quiet according to suppliers in
Western Canada. Buyers continued to work through purchases made in mid- or
late-January. Downstream takeaway was nearly nil as winter weather returned
to much of the North American continent. Sawmills maintained order files
around three weeks out. Asking prices were lowered on bread-and-butter
trims, with little to no effect on sales activity. What meagre business
transpired was confined almost entirely to LTL transactions at the secondary
level.” — Madison’s Lumber Reporter
Compared to the same week last year, when it was US$1,330 mfbm, the price of
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending February 24,
was down by $913, or 69 per cent. Compared to two years ago when it was
$1,040, that week’s price is down by $623, or 60 per cent.
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