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MARKET WATCH

Lumber Prices: A Look Back at the North American Forest Industry in 2017

Posted by Keta Kosman on December 28, 2017

This post was written by guest blogger Keta Kosman, who is Publisher of Madison’s Lumber Reporter based in Vancouver, BC, Canada. For over 60 years, Madison’s has been a leading weekly newsletter detailing current US and Canadian softwood lumber and panel prices. The newsletter includes extensive coverage of Western and Eastern Spruce-Pine-Fir (SPF), Western Red Cedar, Canadian plywood, Oriented Strand Board (OSB) and BC cargo and reload lumber activity in the northeastern US.

What a year 2017 has been! Sawmills across Canada and the US will hardly get a chance to assess this wild 2017 as year-end inventory in their yards is calculated before the new year arrives—with newly-established softwood lumber duties.

It is customary for the entire province of Québec—log harvesters, haulers, sawmills and lumber transporters alike—to take a full two-week break over the holiday season. Often, much-needed inventory and maintenance work is carried out in many sawmills during this time, not just those in eastern Canada.

However, given the “bang” in lumber sales right at the beginning of 2017 and its ever-increasing commodity prices (coupled with rather hot demand even after the usually uneventful US Thanksgiving long weekend), operators are both anticipating and dreading the start of 2018.

The graphs below illustrate December-only prices for WSPF KD 2×4 #2&Btr and OSB 7/16:

 

Madisons_Dec_1.pngSOURCE: Madison’s Lumber Reporter www.madisonsreport.com

 

Madisons_Dec_2.pngSOURCE: Madison’s Lumber Reporter www.madisonsreport.com

 

Important Lumber Market Points for Year-End 2017:

Kiln-Dried Fir Sales Momentum Loss: December 2017As in green fir, consistent and strong demand for Kiln-Dried Douglas fir continued to come out of California—particularly the Southern part of the state—but overall it wasn’t enough to keep producers from lowering their asking prices. Players in the US intimated that the weaker prices had to do, at least in part, with an influx of Canadian dry fir that mills in the Great White North were trying to push across the border in advance of upcoming duties.
Canadian dry fir producers tried to get wheels rolling across the border, but their rail car shipments continued to be held up by late arriving—or just altogether missing—cars.

Western-Spruce-Pine-Fir producers in the United States had more active sales than their Canadian counterparts this week, selling at a discount to print in many cases to keep their inventories lean and mobile.
Sawmill order files varied from mill-to-mill, with most producers maintaining late-December bookings in regard to their bread and butter sizes. The odd mixed load of straight lengths was available for earlier shipment.
Canadian WSPF mills had “a slow sales start” to the week but inquiry picked up by Wednesday. Canadian sawmill order files were still into the week of December 18th and shipments were typically one week late due to rail car problems.
Producers’ on-ground inventories were mounting up; they would have been shipping more if rail cars weren’t so slow and hard to come by.
Meanwhile, log supply remained “tight” and dependent on weather. Folks were turning to every transportation option imaginable to get wood moved before duties kick in.

Current Softwood Lumber Prices Compared to Historical Highs

The below table is a comparison of June and December 2017 prices for benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05:

 

Madisons_Dec_3.pngSOURCE: Madison’s Lumber Reporter www.madisonsreport.com

 

weekly lumber market report and benchmark

Topics: forest industry news, lumber prices, sawmills, canadian lumber

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