The seemingly never-ending winter had barely moved into spring when an
enormous amount of forest fires broke out in Alberta. Raging wildfires
forced the evacuation of roughly 25,000 residents, so far. More than 350,000
hectares burned since January 1st, compared to an average of 800 hectares by
this time of year. Both road and rail transport lanes near Edson, Alta., saw
immediate negative effects from the fires. The town of Fox Creek, including
the Canfor sawmill (previously Miller Western), are also evacuated. This is
a brand-new occurrence; never before have such a large number of such severe
wildfires broken out so early in the season in an important timber supply
area of North America.
Thus what this means for lumber manufacturing, sales, and prices going into
summer 2023 is also unknown.
In the week ending May 12, 2023, the price of benchmark softwood lumber item
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was again US$360 mfbm, which is
flat from the previous week. This is up by $9, or two per cent, from one
month ago when it was $351.
Producers didn’t adjust their asking prices much as they waited to assess
near- and long-term impacts on fibre supply of this catastrophic and early
start to fire season.
“The largely-unchanged North American lumber market collectively held its
breath in anticipation of knock-on effects from catastrophic wildfires in
Western Canada.” — Madison’s Lumber Reporter
The Western S-P-F market was largely unchanged according to traders in the
United States. Horrific wildfires in Western Canada briefly pushed futures
up-limit, but cash didn’t follow. Then the run subsided. Pockets of inquiry
were observed across the country, with special attention paid to studs as
buyers began to secure coverage for June. Overall sales volumes remained
subpar for the time of year however, particularly in bread-and-butter
dimension. Buyers remained hesitant to build inventory, fearing another
unpredictable year like the past three. Sawmills maintained late-May order
files for the time being..
Suppliers of Western S-P-F in Canada all had forest fires on their minds as
out of control blazes swept across large swathes of Alberta and some of
British Columbia. The Alberta government declared a provincial state of
emergency. Demand overall remained subdued, with buyers leaning on their
well-established inventories and dipping into the distribution network when
needed. Four-inch dimension was again the most obviously oversupplied
commodity, while all other widths have also had trouble gaining traction
lately.
“
Prices of Eastern S-P-F continued to recede amid lukewarm demand
according to traders. Eastern Canadian producers showed plentiful
availability on weaker items such as narrow dimension and were open to
reasonable counter offers from pokey customers. Studs were less-susceptible
to this prevalent downward pressure by comparison. By midweek sales activity
picked up and much of that accumulated material had been spoken for as
buyers and suppliers found amenable numbers. Sawmills were able to
strengthen their order files into late May on most items and grades.” —
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$1,110 mfbm, the price of
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending May 12, 2023,
this price was down by $750, or 68 per cent. Compared to two years ago when
it was $1,550, that week’s price is down by $1,190, or 77 per cent.
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