The week of May 6 provided a possible signal of an end to recently downward-spiralling dimension lumber and panel prices, writes Keta Kosman in Madison's Lumber Reporter www.madisonsreport.com
During the first quarter of 2013, producers had been able to put in place steep increases, and by April the push-back from customers was intense.
Sawmill lumber price lists remained largely unchanged until the beginning of April, when customer counter-offers could no longer be ignored. By that time, sawmill order files had shrunk from six weeks or longer to just one or two weeks, depending on the commodity.
The supply-demand balance, which in early 2013 had finally shifted in the favour of producers, was showing signs of another correction as wood ordered in March started reaching end-users. Inventories in the field continued to be light despite claims of some secondary suppliers that wood was plentiful.
Last week, benchmark WSPF KD 2x4 #2&Btr prices dropped $12, or 3.5 per cent, from the previous week to US$340 per thousand board feet (mfbm). This is a $66, or 16.7 per cent, decrease from one month ago but still a $36, or 10.6 per cent, improvement over the first week of May 2012.
However, prices of some specialty lumber items, like studs and some engineered wood products, already started rising again toward the end of April. It is important to remember that often panels lead dimension lumber in pricing adjustments.
A strong indication that lumber commodity prices may soon start firming is the increase in eastern panel prices last week, specifically Oriented Strand Board (OSB) and Canadian softwood plywood delivered to the Great Lakes Zone.
Benchmark OSB 7/16" defied the recent downward trend by rising $1 from the previous week to C$363 per thousand square feet (msf).
Softwood plywood 3/8" prices actually increased by $6 to C$359 msf, ending the week at the same price levels as one year ago. For its part, OSB prices are currently $143, or 39.4 per cent, higher than they were at this time last year.
Keta Kosman
Publisher
Madison's Lumber Reporter
604 984-6838
www.madisonsreport.com