Delivery delays drive lumber prices further down: Madison’s

Similar to the middle of the 4th quarter of last year, North American construction framing softwood lumber prices for the week of April 1, 2022 was almost exactly where it was a year ago. However, last year prices started a major upward ridge to reach impossible record highs. While this year they are down. Demand remains quite firm and inventory somewhat low at a time of year when the biggest producers have made their purchases for the impending spring construction season, so prices historically begin to decline at this time. Reports from industry players indicate that continued agonizing delivery expectations are keeping actual price levels somewhat unheard of. In Canada, the Easter long weekend is a major holiday, so there is a bit of a lull in business for this four-day break.

After several weeks remaining relatively stable, for the week ending April 8, 2022, the Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) softwood lumber benchmark item price was 1,096 US$ mmfbm, which is down -$207 or -8% from the previous week, at US$1,303 mfbm, said Madison’s Lumber Reporter weekly bulletin on the Commodity Industry Price Guide foresters. This week’s price is down -$287, or -21% from a month ago when it was $1,383.

Field inventory was low across the board, but particularly at retailers.

“The recent strong downward pressure on stud sizes and prices has started to affect panels this week.” – Madison Wood Journalist

Western SPF growers in the United States were obviously more aggressive in their sales, with prices falling in bunches with each passing day. Shoppers did their best to sit idly by, eager to see how far prices could drop while they paused purchases. Sawmill order books continued to shrink to less than two weeks.

Although players were careful to mention how mercurial the prices were, reports of massive corrections were unanimous in the Western Canadian SPF market. Producers came to the table aggressively and with wildly varying numbers, which made it difficult for traders to get a solid reading of overall activity. Sawmills have become much more sensitive to deep counters since the start of April.

“Bread and butter STUDS struggled according to Canadian suppliers. The most commonly traded trims were all down triple digits while stud mills maintained two to three week order files. As in the dimension, SPF stud producers in the West received much larger counters than they did throughout March. The downward pressure on prices was evident throughout the week, with buyers limiting their transactions to small-volume complementary purchases, with a focus on the distribution network. —Madison Wood Journalist

Madison’s Benchmark Softwood Lumber and Benchmark Panel Prices: Monthly Averages

Compared to the same week last year when it was $1,130, for the week ending April 8, 2022 the Western Spruce-Pine-Fir 2×4 price is down -$34 , or -3%. Compared to two years ago, when it was $310 mfbm, this price is up +$786, or +254%.