Lumber prices are continuing to rise across North America, and supply is continuing to shrink.
Despite the lockdown, prices have now risen two months in a row - up 15 percent in both April and May. Many analysts had expected demand to decrease, but this appears to have not been the case.
"Prices were nudged up every day as sawmills sold out of stock with ease, and at higher levels," writes Madison's Lumber Reporter. "Customers throughout the market were very underbought, and field inventories remained low even as many buyers abandoned their caution and tried to secure volume. Sawmill order files were into the weeks of June 15th and 22nd. Bread-and-butter sizes continued to garner consistently strong demand, while sales of 2x8 and 2x10 were also really hot."
Supply cuts and curtailments have certainly played a role. Many of the continent's biggest lumber producers, including Canfor, West Fraser, Interfor, Conifex, and PotlatchDeltic, have significantly lowered output during the pandemic. Hundreds of employees have been laid off.
ERA Forest Products Research director Kevin Mason told Bloomberg that many people are opting to fix up their houses as they're shut in.
“You had a lot of people saying, ‘gee I’m stuck at home let’s build that deck, let’s fix up whatever we need to fix,” he said. He also noted the repair and remodel segment accounts for around 40 percent of the market.
Will they continue to rise? Let us know what you think.
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