![]() ![]() These increases came on the heels of OSB price increases throughout 2016. The volume of orders for and prices of OSB and plywood accelerated in the beginning of February. In addition to framing lumber, the price of structural panel products has become worrisome for buyers. The recent surge in southern pine prices (shown above) reflects the fact that major appreciation of S-P-F products allows SP mills to hike quotes without fear of sacrificing their share of the framing lumber market. An example of the pace of price growth is that southern pine 2x10s became 4% more expensive each week from January 27 th through February 24 th. Unlike S-P-F prices-which either held steady or declined during the week ending February 24 th-price increases of southern pine (SP) 2x4s and 2x10s continued their rapid pace. As a result, the price disparity (shown below) shrank 50% by February 17 th. When buyers became true price takers, western S-P-F had more room to increase to a market-imposed price ceiling. ![]() ![]() On January 27 th, eastern S-P-F was priced relative high-$78 more expensive than its western counterpart. Prior to these market changes, eastern S-P-F already traded at a premium relative to western. The baseline price of both products was responsible for most of this difference. Western S-P-F 2x4s became 24% ($76) more expensive during this period, while eastern 2×4 prices rose just 8% ($31). The graph below illustrates the disparity between the price increases of eastern versus western S-P-F from late January to mid-February. The framing lumber composite price rose $25 between February 3 rd and February 10 th, the largest one-week increase since August 2003. mills to raise quotes-as buyers had nowhere else to turn for high-grade products-further boosting the aggregate price level. Other Canadian mills dropped out of the market to mitigate the effects of uncertainty. Producers hiked prices by double-digits on the heels of the futures price changes. Speculation of retroactive duties being imposed on Canadian imports began in late January, as evidenced in a two-week, 12% increase in March delivery lumber futures. Though prices have increased in the aggregate, the composite index masks the magnitude of some of the most volatile, species-specific increases.Ĭanadian softwood lumber imports are predominantly S-P-F. To put that in perspective, consider that the average weekly price change over the course of 2016 was +0.2%. In the three weeks between January 27 th and February 17 th, prices increased by 5% per week, on average. Since the start of 2017, the price of framing lumber is up 15%. However, price trends in the 2001-2006 period (the last time negotiations were held) may offer clues as to what lies ahead. and Canada and thus, lumber prices, is highly uncertain at this point. The outlook of a new pact between the U.S. Failure to reach a new agreement is the primary catalyst of market-wide price increases. The trade agreement that has governed Canadian imports of softwood lumber since 2006 effectively expired at the end of 2016, the mechanics and consequences of which are discussed below. The largest one-month swing of softwood lumber during this period was 2.9% in 2014 according to the Bureau of Labor Statistics Producer Price Index (PPI) (this index will not capture the recent monthly increases until the February data is released in mid-March). During this period, the largest one-week price increase of framing lumber (+6.8%), as measured by the Random Lengths Framing Lumber Composite Index, occurred in the middle of the recent price escalation. Softwood lumber prices have been relatively steady since 2014. The price of lumber, from framing to structural panels, has increased in recent weeks with some prices rising more than 30%. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |