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North America Lumber and Panel Prices Settle Back to Normal Territory

July 18, 2018
Author: Keta Kosman

While still high compared to recent years, US and Canadian lumber and panel prices started to approach what could be considered “normal” territory in beginning the week of July 6. Inventories in the field remain lean; however, sawmills have managed to get wood that was ordered in 2Q shipped out to their customers and are now able to evaluate the assets in their own yards.

Recent price-related mayhem in the lumber market is beginning to abate. Manufacturers and secondary-suppliers’ price sheets and quotes are becoming much more closely aligned, as has been traditionally the case. Some wholesalers and reloads have even started making plans to rebuild inventory.


SOURCE: Madison’s Lumber Reporter


US homebuilding, home sales and home prices appear to be maintaining a steady, upward pace. In Canada, western sawmills recently turned their attention to lumber and log inventories and have focused on log supply, as the standard fire ban will come into effect sooner rather than later. In the east, a large portion of Quebec sawmills closed for St. Jean Batiste Day then again for Canada Day. The usual seasonal closures and curtailments—generally two weeks—will occur in Quebec soon, as a major heat wave there has already caused 33 deaths.

Similar to eastern Canada, there will be production curtailments at some US sawmill facilities (and construction projects) as extreme temperatures make it unsafe to do heavy outdoor work in the coming weeks.

Sawmills across North America moderated their prices in recent weeks to take advantage of holiday disruptions and to book orders for new wood to produce. Many mill customers have assessed their inventories and are realizing that they have immediate needs for projects already online, and they cannot afford to wait any longer—even if prices go down further.


 SOURCE: Madison’s Lumber Reporter


Of massive interest regarding the Canadian duties on US wood is the fact that prices for Canadian plywood—most volume of which is traded in southern Ontario—responded immediately by shooting upward C$50 per thousand square foot (MSF), or 7.5%, the week the Canadian tariffs were announced—from C$620 to C$670 MSF. Prices maintained those levels until last week, when they moderated back down to close at $650. This further substantiates the supply constraints that have been ongoing throughout the North America softwood lumber industry in 1H2018.


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