As expected by most softwood lumber producers at the end of 2019, demand for construction framing dimension softwood lumber products remained steady through the holiday season and looks promising as the industry ushers in 2020.
The latest round of sawmill closures, mostly in British Columbia (BC), and continually improving housing demand in the US are working to keep lumber supplies quite tight in western North America. This past week alone, North American sawmills reported to Madison’s Lumber Reporter that their order files were longer than one week, which is quite good for what is normally a slow time of year.
Some lumber supply issues that were becoming apparent at the end of 2019 remain stubbornly in place. Those who chose to avoid buying any more wood than absolutely necessary, in faint hopes that prices might drop, were not pleased to find that most prices have actually crept up from the end of last year. Spring is still weeks away in most busy construction markets, however unseasonably mild weather last week had builders quite busy. While builders take advantage of the lull in winter weather and stock up on lumber, the uptick in demand has nudged many prices higher.
For their part, reloads, wholesalers and secondary suppliers have also not been building lumber inventory. Players remain cautious, especially given the massive amount of sawmill closures that have taken place in the last 12 months. Sentiment among customers that prices might go down stubbornly persists.
Compared to historical trend, last week's WSPF 2x4 #2&Btr price continued rising, up by another +$4, or +1%, relative to the previous week’s price of US$398 mfbm. Price for this product is up +$74, or +23%, relative to the same week one year ago. This is a big reversal over the same time last year, when this benchmark lumber commodity item price was down significantly… and dropping.
The below table is a comparison of recent highs, in June 2018, and current January 2020 benchmark dimension softwood lumber 2x4 prices compared to low points of September 2015.