Lumber prices dropped yet again at the end of March, as demand remained soft
and customers skeptical. While sawmills were able to book order files out
two weeks or longer, most buying remained just-in-time. Almost no one was
stocking inventory, which is a bit odd given the time of year. Usually by
the end of March the weather is quite improved and all eyes look toward the
oncoming spring building season. This year, the seemingly relentless rounds
of storms and snow across the continent has delayed that burst of spring
lumber buying. Add to that a sense of economic uncertainty, specifically in
regard to home building and housing construction, and the result is low
volumes of lumber sales. The Easter long weekend will reveal much ….
particularly regarding where lumber prices will be as construction finally
ramps up this year.
In the week ending March 31, the price of benchmark softwood lumber item
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$356 mfbm, which is down by
$24 or 6.0 per cent, from the previous week when it was US$380 mfbm. This is
down by $17, or 5.0 per cent, from one month ago when it was $373.
U.S. sawmills with extended production schedules held their prices flat,
while those in weaker positions made it known they were open to all but the
most egregious counteroffers.
“Despite pockets of promising sales in both lumber and panels this week, the
tone remained frustrating and uninspired.” — Madison’s Lumber Reporter
Sales volumes of Western S-P-F in the U.S. hung in there, but suppliers were
frustrated with the lack of improvement as March came to a close. The
vaunted spring building rush was held back by enduring cold weather and a
benighted economic outlook. Faltering lumber futures also caused to buyers
to hesitate with their purchase decisions. Steady demand for 2×4 and 2×6
contrasted starkly with weak inquiry into wides.
While customers stuck to short-covering, Western Canadian lumber suppliers
waited with bated breath for the dam to burst on spring buying. Inquiry and
takeaway of 2×4 and 2×6 R/L #2&Btr was better than of wides, which
experienced weaker demand and some significant downward price pressure.
Wholesalers and distributers reported steady sales volumes thanks to growing
demand from several key construction markets where spring weather has
arrived. Sawmill order files were into the week of April 10th.
“Eastern Canadian lumber suppliers were busy as a revolving door of
buyers kept orders flowing. That steady downstream activity boosted the
confidence of wholesalers and distributers, who consistently replenished
their inventories with a variety of items. For their part, producers kept
asking prices flat or slightly down from the previous week’s levels. The
ample availability shown by both primary and secondary suppliers early in
the week dried up noticeably by Wednesday as buyers appeared to lose the
upper hand of shopping around at their leisure. Thanks to that strong
takeaway in the early going, sawmill order files now stretched into the
second or third week of April.” — Madison’s Lumber Reporter
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly
Averages
Compared to the same week last year, when it was US$1,410 mfbm, the price of
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending March 31,
this price was down by $1,054, or 75 per cent. Compared to two years ago
when it was $1,040, that week’s price is down by $684, or 66 per cent.
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