While inquiry and demand for wood remained strong, many lumber commodity prices seem to be levelling off in North America, according to Madison’s Lumber Reporter. Of course, this is at higher levels than prior to two years ago. However, as mentioned by Madison’s often, those pre-2020 prices will never be seen again. Due to several fundamental reasons, also often explained by Madison’s, we are never going to have $300 2x4s again. Usually the peak of lumber sales, therefore prices, is in February as the large US home builders make their purchases necessary for the looming spring construction season. Whether these current lumber price levels will remain, or rise further next month, remains to be seen.
In 2021 the increase in both US and Canadian house prices was stark, and the momentum of demand for homes remained high. As such, there is no reason to believe lumber sales will slow down any time soon (meaning: this year).
Lumber prices gained strength however there were indications that a top could be in sight. In the week ending January 21, 2022, the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) was US$1,220 mfbm, said Madison’s Lumber Reporter.This is up by +$50, or +4%, from the previous week when it was $1,170. Last week’s price was up by +$417, or +52% from one month ago when it was $803.
Overall demand was tepid compared to the first two weeks in January, but still resulted in another round of price hikes from Western S-P-F producers in Canada.
Demand continued to handily outstrip supply of Western S-P-F in the United States. Sawmills responded by again boosting their asking prices on R/L dimension and studs. Traders described a disconnect between retailers and their customers; with the former adopting a more circumspect approach after a blast of winter weather, while the latter clamoured for more wood to furnish jobsites.
Logistics continued to be the greatest source of consternation for Western S-P-F producers in Canada, with myriad reports of sawmills getting further behind on shipments as weekly rail car allotments consistently missed the mark. Producers maintained order files ranging from early February to early March in some cases.
When compared to the same week last year, when it was $894, for the week ending January 21, 2022, the price of Western S-P-F 2x4 was up by +$326, or +36%. Compared to two years’ ago when it was +$402, that week’s price was up by $818, or (203%).
