REPORT: Lumber prices find a balance

VANCOUVER, B.C. -- For the moment, reports Madison's Lumber Reporter, it seems the North American construction framing dimension softwood lumber market has found a supply-demand balance, as the benchmark price drops slightly but many others remain flat.

In the week following Easter, sawmills, and wholesalers seemed to find good price levels that attracted back customers who may have been waiting to book purchases. Suppliers reported robust sales on continued plump inventories, while buyer enthusiasm pushed sawmill order files into early May.



Weather factors

Good spring weather brought increased construction activity in many markets across the US, while Canada was hit by cold weather and snow. The snow will melt, and the building will soon move into high gear across Canada as well, according to the survey.

US housing starts in February were up, indeed reaching highs not seen since mid-2006, however, building permits were down compared to the previous month.

Total housing starts in the US for March 2022 increased by +0.3% from February to a seasonally adjusted annual rate of 1.793 million units. This is an almost +4% improvement from the same month one year ago when it was 1.725 million.

Meanwhile, March permits for the future home building were also almost flat, up +0.4% from the previous month, to 1.873 million units, compared to 1.865 million in February. March 2021 permits are up +6.7% compared to one year ago when it was 1.755 million.

The backlog of houses approved for construction that are yet to be started increased by +2.9% to yet another all-time high of 280,000 units in March. Indeed, the number of single-family properties under construction continued to climb, reaching 811,000 — the most since 2006. Such a backlog points to a robust pipeline of work for builders in the months ahead.

When looking at the inventory of homes on the market, it is important to note that existing home sales, which comprise over 88% of total sales, have few homes on the market. This strongly suggests continued new home-building activity.

Benchmark prices & US housing starts 

March starts of single-family housing, the largest share of the market and construction method which uses the most wood, was 1.200 million annualized, down by -1.7% compared to February, when it was 1.221 million. Building permits are generally submitted two months before the home building is begun, so this data is an indicator of May construction activity.

After showing big jumps year-over-year for most of the past year, March 2022 single-family starts are down -4.4% compared to one year ago when they were 1.255 million units.

Looking at lumber prices, dropping slightly from the previous week, for the week ending April 22, 2022, the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) was US$1,060 mfbm, down -by $36, or -3%, from the previous week when it was $1,096, said Madison's Lumber Reporter. That week's price is down by -$323, or -23% from one month ago when it was $1,383.


Have something to say? Share your thoughts with us in the comments below.

Profile picture for user larryadams
About the author
Larry Adams | Editor

Larry Adams is a Chicago-based writer and editor who writes about how things get done. A former wire service and community newspaper reporter, Larry is an award-winning writer with more than three decades of experience. In addition to writing about woodworking, he has covered science, metrology, metalworking, industrial design, quality control, imaging, Swiss and micromanufacturing . He was previously a Tabbie Award winner for his coverage of nano-based coatings technology for the automotive industry. Larry volunteers for the historic preservation group, the Kalo Foundation/Ianelli Studios, and the science-based group, Chicago Council on Science and Technology (C2ST).