SYP Tracker–May 2012 Mill2Market Results

In May, Southern Yellow Pine lumber prices continued to increase following April's gains; the composite price increased 5.2 percent throughout the month of May. Prices rose in Week 19 and then hit the monthly high in Week 20 (see chart below) at $342/MBF. They then took a week-long break, falling back to $331/MBF in Week 21. Prices rebounded in Week 22, however, gaining back almost all the loss, ending at $341/MBF at the end of the month.

A historical look at May shows that pricing trends are continuing to follow the general trends set in 2010. However, the increased spring prices have continued longer this year, likely due in part to favorable weather conditions, increased housing starts and other home projects that have continued to fuel lumber sales.

About the Data

The figure above summarizes pricing data gathered for Forest2Market’s weekly lumber market report, Mill2Market. For this market report, Forest2Market aggregates sales order data submitted directly by report subscribers. This figure charts weekly sales order prices from January 2010 through year to date 2012 and compares sales order data, FOB Mill on a volume weighted $/MBF basis. The prices in the figure are composite prices; they include dimension lumber, timbers and boards.

For Mill2Market, Forest2Market collects 100 percent of all transactions—both sales orders and invoices—from 100 percent of all its subscribers. All prices are reported not as simple averages, but as volume weighted averages. For instance, if one order included 10 MBF at $260 and another included 100 MBF at $280, instead of reporting the average price at $270, Forest2Market would report the volume weighted price, which is calculated as follows:

($280 x 100 MBF) + ($260 x 10 MBF) ÷ 100 MBF    =      $278/MBF

Using this method, Mill2Market provides an analysis of the southern yellow pine market in two ways:

1. A weekly market report that provides a real time description of how the market is operating in the current week. This report uses sales order information in order to capture the current market.
2. A quarterly market report that provides a comparison of an individual subscriber’s performance against the market. This report reflects invoice data in order to accurately capture final price.

For more information, visit the Mill2Market page of our website, or call Bob Bratton at 980-233-4034.