The figure below 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.
Forest2Market’s composite lumber price fell by 16 percent in the month of June. Lumber prices decreased at the start of the month to $318/MBF (Week 23) a $23/MBF decline from the previous week. Price fell slightly in Week 24 and then dropped more in Week 25 to a price of $290/MBF. Composite lumber price finished them month at $287/MBF (Week 26).
Overall, average sales order volume per mill in June increased by 80 percent from the end of May, which had the lowest sales order volume per mill year to date. Sales order volume throughout the month mirrored sales prices with large increases in orders in weeks where prices fell steeply (Week 23 and 25) and slight gains or losses in order volume where prices only fell moderately.
A historical look at June shows that pricing trends continue to follow the general trends set in 2010. Prices have fallen as a result of low sales order volume similar to the trend experienced in previous years; however, with a recent uptick in volume, one wonders whether prices will continue to drop as they did in 2010.
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 + 10) = $278/MBF
Using this method, Mill2Market provides an analysis of the southern yellow pine market in two ways:
- 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.
- 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.