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Blog

Southern Yellow Pine Lumber Prices Up 4.4 Percent in 2010

January 04, 2011
Author: Suz-Anne Kinney

According to Forest2Market Lumber Price Report:

A beginning of the year assessment of 2010’s Southern Yellow Pine lumber market by Forest2Market shows that the weighted average price for dimensioned lumber (grades #1-#4) increased 4.4 percent from $252 per thousand board feet (mbf) at the end of December 2009 to $263 per mbf at the close of 2010.

“A broad look at the market shows that prices were mixed in 2010. The number of grades/dimensions that were down in price is nearly equal to the number of grades/dimensions that were higher. Mill2Market, Forest2Market’s weekly lumber price report, shows that all dimensions of #4 grade increased and that all dimensions of #3 decreased. Price changes were mixed for #1 and #2 grades.

“If we look solely at price, what the 2010 numbers tell us is that the lumber market is just about where it was last year,” said Bill Nocerino, Manager of Forest2Market’s Lumber Division. “If we look beyond price, however, one significant difference emerges—the supply of logs to sawmills. At the beginning of 2010, sawmills faced a log shortage due to an exceptionally wet fall in 2009; as the height of the busy spring season approached,  mills were unable to quickly source the logs needed to meet the drastically increased production demands they were facing. Because mills had already decreased inventory to minimal levels in 2009 due to the recession, prices spiked and pushed lead times out weeks and sometimes months.”

“We don’t anticipate a repeat performance,” explained Nocerino. “Sawmill inventories are much healthier now than they were at this time last year. In general, we think log supply will be sufficient to meet demand in 2011, and this will keep prices in check. Instead of a repeat of last year, we’ll see modest price increases as the busy season approaches, when demand will slightly outweigh supply due to reduced mill production. Prices will then level off and slowly retreat once the hot summer months hit the South.”

Forest2Market’s 2011 forecast calls for a year of modest growth for the sawmills, traders and treating plants that survived the recession. This growth will be driven by increased sales volume and improving market stability. “While this stabilization might not happen quickly enough for those hanging on by a thread,” said Nocerino, “the projections show the worst is behind us.”

Links:

  • Mill2Market Report


Suz-Anne Kinney: +1 980 233 4021 or suz-anne.kinney@forest2market.com

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