Lumber Market Update

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Published on: 1/6/17

Lumber pricing has not cooperated to this point in the winter.  Prices have remained strong with a continued slow upward trend.  All of us in this business historically look for buying opportunities starting in late October, but it has been a frustrating situation so far this off-season.  We do still expect some softening late in January with a somewhat flat February, but levels will remain historically high with prices effectively “bouncing around at the top”.  There is a lot more wood moving through the market right now than has occurred in recent years, and industry capacity is still much smaller than it was prior to the recession.  Construction activity continues to gain momentum.  Lumber pricing is now between 9% and 18% higher than this time last year, depending on species, length and grade.

As buying activity for spring peaks in March, prices are expected to go somewhat higher until the spring rush is over (at least through Memorial Day).  In addition to normal supply and demand, several non-typical factors are also affecting the lumber market including (1) post-election optimism; (2) the expired lumber agreement between Canada and the U.S.; (3) the fair trade investigation of Canada by the U.S. and the anticipated penalties; (4) the strength of the U.S. Dollar; and (5) the international softness of Far East lumber demand.  All these factors are “active” and unpredictable in their direction and potential influence on the lumber market.  Future pricing has become impossible to accurately forecast.  But, there is simply not much to indicate lumber prices will drop significantly in 2017.  Therefore, not much relief is anticipated.  We all need to watch this closely as many projects are quoted and sold prior to when we will have a clear picture of lumber pricing direction for that given project.

More updates will follow as time passes and the 2017 market further develops.

Rigidply Rafters, Inc.
Kenneth J. Guffey, P.E.
General Manager