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MARKET WATCH

Lumber Prices in the Final Week Before Traditional Forestry Holiday Break

Posted by Keta Kosman on December 21, 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.

The North American forest industry is about to take its customary end-of-year break, but expect the lumber business to come back with a bang at the beginning of 2018—just as it was in 2017.

On December 7, the US International Trade Commission released a pre-announcement of its looming Final Determination on Canadian imports of manufactured softwood lumber products to the US. The timing of this announcement indicates that these duties will take effect at the beginning of 2018, even though some small adjustments were made to individual company duty rates.

The below table is a comparison of December 2015, 2016 and 2017 prices for benchmark Western Spruce-Pine-Fir 2x4s and Southern Yellow Pine 2x4s on the East side:

 Madisons_1.png

 SOURCE: Madison’s Lumber Reporter www.madisonsreport.com

 

The graph below illustrates peak-and-valley year fluctuations for WSPF KD 2×4 #2&Btr prices.

 Madisons_2.png

 SOURCE: Madison’s Lumber Reporter www.madisonsreport.com

 

Year-End Period Usually Slow Time for Selling Lumber

A significant correction on benchmark WSPF dimension prices in recent weeks moderated the wild ride construction framing softwood lumber prices have taken since the beginning of 2017. In the east, ESPF 2×6 also had a big adjustment.

Expectations are that most wood commodity prices will remain generally level until more volatility hits the market right at the beginning of 2018. Anecdotal comments from suppliers indicate the duties have already been absorbed into prices and the US International Trade Commission’s announcement has had no impact on price levels.

Scuttlebutt is forming about #3 / Utility and #4 / Economy grade 2×4 and 2×6 throughout the marketplace. This lower-grade item is often sold as cut-stock into remanufacturing for pallets and crating (as well as furniture and other products). It seems US grocery suppliers and other pallet producers are facing critical shortages in this cut-stock as the majority of manufacturers have been up-grading their #3 and #4 materials to sell into the screaming-hot standard construction framing market.

weekly lumber market report and benchmark

 

Topics: lumber prices, forestry, canadian lumber

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