Carrying through on the previous two weeks' sales momentum, lumber prices this week remained essentially flat except a few key commodities, writes Keta Kosman in Madison’s Lumber reporter.
https://madisonsreport.com/.
Benchmark dimension lumber item, Western Spruce-Pine-Fir KD 2x4 #2&Btr, softened by $2 only and ended the week at a solid US$356 mfbm. New orders from sawmills were fewer than last week even, which is completely normal for this time of year.
Most producers had orders booked through October thus felt confidence to keep prices up. Resellers grumbled that mill claims of three or four week order files were "posturing", but failed at having their counter-offers entertained regardless.
Lumber producers across Canada and the US were busy enough filling existing orders and shipping freshly-produced wood out, that they didn't need to spend time booking sizable new orders for the beginning of November.
Engaging in difficult discussions about what prices might be at that time was far from lumber sellers' minds. Customers satisfied themselves with small, highly-specified buying for inventory fill-in purposes only. Consequently prices changed little.
However there was one commodity which did make a big move upward in price this week, and it's an important one for industry watchers to note because more often that not it is a leading indicator both of short-term lumber price changes and of greater economic conditions.
Quite surprisingly this week, according to lumber traders, benchmark panel item Oriented Strand Board (OSB) 7/16" Ontario popped an astonishing $17, or almost 7 per cent, to C$347 msf. This, at a season when players usually have stocked up wholesale and reload yards with enough wood to get them through expected demand to the end of the year.
To view the OSB price chart, please click on the link:
https://stockhouse.com/media/baimg/OSB-7-16-ONT-10year1.jpg
As buyers and sellers struggle to find price floors each consider acceptable, the tenuous supply-demand balance continues to wreak havoc with even the most veteran players' expectations. Panel traders in the east especially said this week they've, "never seen the market this confused".
For the moment forecasting what will happen with panel, both OSB and plywood, prices through this year and into the beginning of 2014 is an almost pointless exercise.
Generally speaking, in 4Q, it is only if there are severe storms in the US east and southeast that panel prices make significant moves during that season. At the moment, however, the supply chain for all solid wood commodities remains so ravaged that price volatility will continue likely through next year's spring building season, and possibly beyond.
Georgia-Pacific, out of Atlanta, GA, announced Thursday that it will invest approximately an initial US$9 million at its Dudley, NC, lumber operations as part of a multi-phase increase in the mill's lumber production capacity and supporting infrastructure.
On Tuesday Vancouver, BC's,
Ainsworth Lumber Co. Ltd. (
TSX: T.ANS,
Stock Forum) notified that its conference call for 3Q earnings will take place on Thursday, October 31, 2013 at 10:00 am PT (1:00 pm ET).
Follow us on Twitter!
https://twitter.com/KetaK
Keta Kosman
Publisher
Madison's Lumber Reporter
604 984-6838
www.madisonsreport.com