Even in the middle of May the usual spring home construction did not
materialize. The harsh winter was a distant memory as normal seasonal
weather was upon North America, yet building activity did not increase.
Whether it was concerns over macroeconomic conditions, questions about
potentially low new home sales, or simply uncertainty in general; most
players were staying on the sidelines with their lumber purchases. It seemed
like everyone was waiting to see what everyone else would do.
Meanwhile, the wildfires in Alberta were somewhat reduced however still very
serious. It turns out that about half those forest fires were caused by
human activity, which is incredibly disappointing; specifically because
those could have been avoided. At this time in mid-May those fires burned
almost 900,000 hectares of Alberta forests.
In the week ending May 19, 2023, the price of Western Spruce-Pine-Fir 2×4
#2&Btr KD (RL) was US$360 mfbm, which is flat from the previous week. That
week’s price is up by $9, or two per cent, from one month ago when it was
$351.
Buyers were still extremely hesitant to take long positions and instead kept
to short-covering, leading to perpetually-low field inventories.
“
Wildfires in Western Canada were top of mind this week while the broader
North American solid wood commodities market continued to stumble slowly
into mid-Spring.” — Madison’s Lumber Reporter
Sales activity remained atypically lukewarm for the time of year according
to Western S-P-F traders in the United States. Most players agreed that the
upcoming Victoria Day and Memorial Day holiday weekends in Canada and the
U.S. respectively will be the next crucial litmus test for the North
American lumber market. For their part, U.S. sawmills established order
files around two weeks out, but many regional facilities continued to show
prompt availability on certain widths and trims. Steady inquiry and takeaway
from industrial buyers kept low grade material moving.
Wildfires continued to be a main topic of conversation this week among
Western Canadian S-P-F lumber traders. Many thousands more residents were
forced from their homes as ongoing hot and dry conditions fuelled blazes
across much of Western Canada, particularly in Alberta. Recent sawmill
curtailment announcements added another looming question mark to the state
of supply. Even though buyers remained circumspect and sales volumes were
still lacklustre for the time of year, promising signs of increasing future
demand were evident. Transportation appeared to be smooth for the time
being, as forest fires haven’t closed any major highway routes as yet. There
were pockets of slow-moving freight in Alberta due to the blazes, however.
“Traders of Southern Yellow Pine were beginning to sound like broken
records. Prices of narrow dimension R/L items were almost identical to last
week, while 2×12 remained the strongest seller and most scarce commodity.
Traders tried to impress upon their customers that 2×8 and 2×10 were a solid
value currently. Demand for SYP MSR was hopping as truss producers were
busier with each passing week. Low grade showed some hustle as that category
has been tight in supply lately.” — 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$1,070 mfbm, the price of
Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending May 19, 2023
was down by $710, or 66 per cent. Compared to two years ago when it was
$1,640, that week’s price is down by $1,280, or 78 per cent.
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