Big box stores in the US entered the North American lumber market this week with a substantial swoosh, as retailers bought up the entire available supply of Western SPF nine-foot studs, writes Keta Kosman in Madison's Lumber Reporter
https://madisonsreport.com.
WSPF stud mills in Canada went off-the-market on all nine-foot lengths, having sold out of production of that size through February 10th.
The prevalence of demand for nine-foot items could indicate strong US multi-family starts again this spring, as that length is most often used for condominium and apartment building.
Southern Yellow Pine (SYP) species lead the market once again this week with further significant price gains. Interestingly, and this may also be driven by multi-family building, it was the 2x6 size which popped the most. SYP KD 2x6 #2&Btr in the east gained a remarkable $20, or 4 per cent, to finish the week at US$370 mfbm.
As supply constraints and ongoing transportation issues, especially on the rails in Canada, continue, there may be a price squeeze on domestic US lumber products this spring. West coast mills on both sides of the border will continue to nurture important new export customers in Asian emerging markets, so as US home building numbers keep improving there will be pressure on US domestic lumber supply.
As for benchmark Western Spruce-Pine-Fir, even as the more widely-traded 2x4 size remained flat at US$376 mfbm, a run on WSPF KD 2x4 #3/Utility grades drove the price of that commodity up $8, or 2.4 per cent, to US$330 mfbm.
Following a recent trade mission to China, the BC government announced this week it had signed in November a $1 billion memorandum-of-understanding with trade officials in China. Government, industry, and agencies from both countries will be working to further improve BC lumber exports to China.
Cedar sellers, meanwhile, reported extremely strong sales for so early in the season. Players expressed surprise at continued strong demand, mentioning that this usually doesn't happen until the middle of 2Q.
Companies making announcements this week include
Canfor Corp. (
TSX: T.CFP,
Stock Forum), which will be investing $15 million in upgrades to its Grande Prairie, AB, mill. Also
Western Forest Products Inc. (
TSX: T.WEF,
Stock Forum) said this week it will release 4Q and full-year 2013 results on February 20.
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Keta Kosman
Publisher
Madison's Lumber Reporter
604 984-6838
www.madisonsreport.com