Most lumber prices flatten over holidays: Madison’s

As we continue to enjoy the bliss of summer, the calendar shifts inexorably towards fall. It is typical for this time of year for most lumber prices to be low or falling as most of the big buyers (i.e. large US homebuilders) have received the wood they need for ongoing and planned projects. There is an interesting symmetry between current prices and those of two years ago; most lumber prices are currently in line with end of August 2020. This is similar to another interesting development, that the trend in lumber prices at the end of last year was almost exactly in line with the previous year . This begs the question: is 2020 the new benchmark for timber price highs and lows? Do the price changes in 2020 indicate the new annual trend, rather than the seasonality that we have all been accustomed to for several decades?

Only time will tell, but everyone can be sure that Madison’s will be there to recognize all the important indicators and advise the industry on what to look for next.

Remaining stable compared to the previous week, for the week ending August 19, the Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) softwood lumber benchmark item price was 624 $US mfbm, same as the previous week when it was $624, and is down $47, or 7%, from a month ago when it was $671.

There were still opportunities there, as multi-family construction in the United States seemed positive lately, there was simply no one to do the lumber sales deals.

“The North American solid wood commodities market was generally calm as warm weather put a break on large swaths of construction and crowds of players went on vacation.” — Madison Wood Journalist

Western suppliers of SPF to the United States were plunged into a nonchalant late summer downturn. Sawmills maintained two- to three-week order files amid lukewarm demand as most players preferred to flee to vacation spots rather than toss lumber and dowels in the scorching heat. Factories have struggled to transport their substandard materials at today’s prices.

The Western SPF market has calmed down again, after a surge in selling activity the previous week largely attributed to West Fraser’s cutback announcement. The pace of construction work in Western Canada was noticeably slower as warm weather caused workers to rush from job sites to vacation destinations. Producers have reported ongoing log supply difficulties, exacerbated of late by rising temperatures that have limited logging and transportation in many areas. Sawmill order records fluctuated between late August and early September.

“Suppliers of Douglas fir green items felt like someone had let the air out of the market. After a promising wave of sales the previous week generated by the redesignation of timber futures and the West Fraser cutback announcement, buyer urgency dropped again.There was more inquiry than follow-up, as many players hoped for another round of corrections before considering buying real volumes. Growers reported limited supply roughly in balance with weak demand. Order records from Douglas fir sawmills were in the weeks of August 29 or September 5. — Madison Wood Journalist

Compared to the same week last year, when it was $390 mfbm, the price of Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending August 19 increased by 234 $, or 60%. Compared to two years ago when it was $850, the price this week is down $226, or 27%.