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Lumber prices stabilize, demand for softwood remains strong

Busy summer construction period creating need for framing material
Softwood lumber prices in North America have stabilized with demand from the construction industry high and inventories low.

A healthy new-housing construction market combined with very low inventory levels have combined to increase demand for softwood lumber in North America, according to the industry benchmark Madison’s Lumber Prices Index report, issued Wednesday.

A thousand board feet of mixed species lumber (spruce, pine, fir) is selling this week for US$496, down $2 from last week.

“Prices on many items rebounded somewhat, with specialty commodities like studs leading the charge,” the report states. “Customers were caught flat-footed by diminishing supply as actual building activity got into high gear for the first time this year.

“Severe wildfires in (Canada) were ongoing, while weather conditions provided little hope of a respite any time soon. The unknowns of possible sawmill curtailments and lowered lumber production volumes served to motivate buyers to step in with booking purchases for wood needed into the coming weeks and month.”

Construction framing lumber prices flattened out towards the end of July and Industry analysts are convinced the softwood prices have crested at stable levels which lumber producers and the sawmill industry have sought for the past two years.

“Certainly those incredible highs of US$1,600 mfbm during the worst of the COVID disruption to business and society are not expected to return; but also those persistent lows of approximately US$250 mfbm for the decade previous are not expected either.

“This is due to the sharp increase in cost-of-production, especially in the important timber supply basket of British Columbia.”

Prices this year for 1,000 board feet of 2 X 4 WSPF lumber have ranged from a low of US$352 to a high of US$476.