Increased construction of multiple family homes in the United States has translated into a significant rise in lumber prices that should carry through the summer, says a forest industry observer.
Since the end of March, the price of Western Spruce Pine and Fir 2x4 dimension lumber has increased 27 per cent to $300, Madison's Lumber Reporter publisher Keta Kosman said Friday.
Over that same span, utility #3 rose only three per cent but 2x6 lumber rose 10 per cent, "which is telling us that it's U.S. multi-family construction because that's what the 2x6 is for," Kosman said.
The trend marks a change from the trend for the past few years, where increased demand in China for utility grade has prompted buyers to move up to #2 and better.
Kosman said the trend should continue.
"A month from now, I don't know if we're going to be up another $50, but we're not going to be down," Kosman said. "Through summer, these prices will likely remain close to where they are."
Kosman had initially held off on making the forecast because of concern the recent disaster at Lakeland Mills, following the January explosion and fire at Babine Forest Products in Burns Lake, may have caused a temporary spike.
But she also noted prices for lumber produced in the east are also on the rise.
"Everything is up," Kosman said. "The comments from our sources are that people just can't find wood."
Prices generally rise from January to about mid-March as mills supply retailers and home builders in advance of the building season and by now prices start to go down, Kosman said.
