TSX:IFP - Post Discussion
Post by
StefanSalvatore on Jun 11, 2021 10:31am
Another CIBC update on lumber prices
Lumber Prices Deflating Rapidly Lumber Prices In Steep Retreat: Random Lengths reported that W. SPF prices declined 14.3% or $210 W/W to $1,260/mfbm (down $115 from midweek) [+240% Y/Y], while SYP 2x4 fell 12.8% or $158 to $1,078/mfbm (down $72 from midweek). Prices of both grades are now off 23%-24% from their all-time peak three weeks ago. The RL Composite declined 8% to $1,324.
In W. SPF, buyers (including builders) remained quiet while mills aggressively looked for trading levels. Traders were of the view that participants were assessing the market as prices plummeted from historic levels. Quotes spanned a wide range, with some 2x4 reportedly transacting under $1,200 while quotes were as high as $1,370.
In SYP, markets were chaotic as producers searched for trading levels and buyers pondered just how much further prices could decline in the coming weeks. Most buyers only purchased if necessary, generally staying on the sidelines. Treaters maintained a low profile as demand from box stores and the DIY sector continued to erode. Heavy rain in parts of Texas also weighed on consumption.
While valuation appears compelling given improved balance sheets and expected healthy pricing next year, we expect wood equities could come under additional pressure over the near term until lumber prices start to stabilize.
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