January 2023 is ending, and with it the usual seasonal large-volume buying
by the big US home builders has begun. Because they want the wood needed for
their projects on the ground before spring building activity, customers make
their orders now to accommodate possibly extended delivery times. As such,
it is usual for lumber prices to start rising into the end of January. In
addition to that normal seasonal trend, there has been in the past couple of
months significant lumber production volumes taken offline due to various
downtime and curtailment announcements. The majority of these have been in
British Columbia, while other jurisdictions in North America have also
slowed manufacturing. Expectations are that these facilities will be coming
back online definitely during February, if they have not already.
In the week ending January 20, 2023, the price of benchmark softwood lumber
item Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) was US$374 mfbm, which is up
by +$4 or +1%, from the previous week when it was US$370 mfbm, said weekly
forest products industry price guide newsletter Madison’s Lumber Reporter.
This is down by -$19, or -5%, from one month ago when it was $393.
Sawmills extended their order files into early February in numerous cases.
Sales of lumber and stud markets took a palpable step forward while that of
panels continued to lag behind.
Demand for Western S-P-F jumped out of the gate this holiday-shortened week
in the United States. Buyers weren’t speculating or going after large
volumes just yet, but overall demand was noticeably up for the first time in
January 2023. Field inventories remained low, consistent with the time of
year. One experienced player noted that this was the most positive tone the
market has seen in the last several months. Producers were encouraged by
consistent sales and nudged their asking prices up on many key widths and
trims. Demand for WSPF studs was stronger than for dimension items. Players
were thankful that transportation was a non-issue, especially after the
challenges experienced last year at this time.
Canadian Western W-S-P-F producers boosted their asking prices and pushed
out their order files as promising demand came from buyers on both sides of
the border. Sawmills reported order files into late-January or
early-February, with sales of 2x4 and 2x6 R/L dimension leading the way.
Buyers were apparently reluctantly looking toward their spring requirements
instead of just replenishing immediate needs on a weekly basis. Overall
supply levels remained subdued thanks to recent curtailment announcements by
several major producers. As sales volumes got going, availability tightened
up commensurately.
Sales of kiln-dried Douglas-fir lumber and studs finally seemed to turn a
corner, with sawmill asking prices appearing to bottom out in most cases.
Secondary suppliers in the United States reported much better trading than
the previous week. Following the zeitgeist in the broader dimension lumber
market, 2x6 was one of the most sought-after and tightest widths min terms
of availability. Scant supply of wides was still significantly behind firm
demand. Log supply was an ongoing issue, especially with heavy and
relentless precipitation blanketing most of the Pacific Northwest. Hauling
water-laden Douglas-fir logs on mushy forest roads was essentially an
impossible task.
Compared to the same week last year, when it was US$1,170 mfbm, the price of
Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) for the week ending January 20,
2023 was down by -$796, or -68%. Compared to two years ago when it was $944,
that week’s price is down by -$570, or -60%.
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