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Industry Baffled as Lumber Prices Soar Higher

Scorpio

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Industry Baffled as Lumber Prices Soar Higher​

May 7, 2021 — Softwood lumber and panel (plywood and OSB) prices rose by even more the week of May 7 than they did the week before, indicating that demand for construction framing wood products is not slowing down. It’s true though, that prices can not just keep going up forever.​

Madison's Softwood Lumber Benchark green and KD Construction Framing Dimension Softwood Lumber and Panel Prices MAY 2021
madisonsreport.com
There is a ceiling, and it seems we might just be approaching that. Trading of lumber futures on the Chicago Mercantile Exchange reached a fever pitch toward the close of the existing contract, which expires May 15. Prices of lumber futures had soared to $1,700, and have since been correcting downward. Lumber supplies and inventories in the field remain extremely tight; however customers are reaching a point where they simply can not pay more and can not pass the price increases on to end-users. Recent terrible storms in the US south add unpredictability to near-term lumber prices, as immediate demand for rebuilding and reconstruction will not improve the supply situation.
Meanwhile, in 89% of US metro areas, median house prices have risen by more than +10% from a year earlier, reported Redfin this week. As home the selling, buying, and moving, season comes upon us, the expectation is for housing construction — thus lumber prices — to remain high at least in the short term.

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages​

Madison's Softwood Lumber Benchark green and KD Construction Framing Dimension Softwood Lumber Prices MAY 2021
madisonsreport.com
Demand for Western S-P-F commodities in the US remained strong as can be. Players did note more hesitation from buyers as prices continued to drive them round the bend, but there was more than enough inquiry and takeaway. Early June order files prevailed at sawmills, while improving construction activity across the country ensured no stone went unturned. Harried buyers and secondary suppliers searched for any scrap of inventory available. As always, customers sought out the quicker shipping wood but came up empty-handed. Plenty of reports surfaced of buyers paying prices significantly higher than already-historic print levels, just to secure a load.
Prices lurched ever higher, buyers’ frustrations mounted, and virtually nothing was available for shipment earlier than June.”
— MADISON’S LUMBER REPORTER
In Canada Western S-P-F dimension lumber prices vaulted up again. Producers saw no signs of this slowing down since demand only seemed to be increasing, and buyers were relentless in their efforts to keep inventories from running down to pavement. Canadian sawmills sold out within seconds every time their product hit the market, showing virtually no open cash wood available. Sawmill rder files to May 31st were reported, which equated to June 7th shipment due to backlogged cars. Mills in Southern BC had extra trouble with rail service, pushing their shipment times into late June.
Unrelenting demand continued to pour in for Southern Yellow Pine lumber and studs. Sawmill order files pushed into early June. The Southern United States was lashed by intense weather and flooding recently, with more severe thunderstorms and tornado warnings forecast.”
— MADISON’S LUMBER REPORTER
Continued price increases were met with disbelief, however inventories throughout the supply chain are so low that customers could do nothing but pay. In the week ending May 7, 2021 the wholesaler price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr was US$1,550 mfbm. This is up by +$130, or +8%, from the previous week when it was $1,420.
That week’s price is up by +$320, or +26%, from one month ago when it was $1,230.
Western Spruce-Pine-FIr KD 2x4 #2&Btr prices MAY 2021
madisonsreport.com

Compared to the price one-year-ago, when it was US$354 mfbm, for the week ending May 7, 2021, the price of Western S-P-F KD 2×4 was up by +$1,196, or +338%.​


 

the_shootist

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shit damn fuck

I am in the middle of a kitchen remodel

I was going to finance the project be selling a few bits of crypto but noooooooooo , cryptos taking a dump

It’s my double whammy!



View attachment 211384
Damn dude, that's a big project alright. Wanna sell some metals? I have some dry power :2 thumbs up:
 
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the_shootist

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shit damn fuck

I am in the middle of a kitchen remodel

I was going to finance the project be selling a few bits of crypto but noooooooooo , cryptos taking a dump

It’s my double whammy!


I'm in the same boat! Finishing the basement!

Had I purchased materials 2 months ago I figure I would have saved at least a grand!
 

the_shootist

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I had planned on hardwood floors for the entire second floor. That's been put on hold until the fake wood shortage has run its course like every other fake government shortage we've endured in the past
 

gringott

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I have a project I have been sitting on for two years, I have to make a platform for a shed. Couldn't make up my mind between wood and a concrete pad. Really. Kept debating in my mind. I do have a third alternative, put it on a trailer, but I couldn't find one cheap enough. That would require wood anyway. Harbor Freight has some cheap enough trailers, but they haven't been in stock for two years now.

Guess I am going concrete.
 

edsl48

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shit damn fuck

I am in the middle of a kitchen remodel

I was going to finance the project be selling a few bits of crypto but noooooooooo , cryptos taking a dump

It’s my double whammy!



View attachment 211384
Nothing that wouldn't help out right now than another stimulus check and with the two year elections on the horizon we might just get another one or two.
 

gringott

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I need my UBI. I self-identify as a billionaire.
mooo
 

Scorpio

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update from snowflake city,

tiles like that are coming back around the bend again,
they are using them in showers, on floors, and yes also backsplashes,

wonder if one of these days they will also bring back the avocado and harvest gold appliances :0)
 

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wonder if one of these days they will also bring back the avocado and harvest gold appliances :0)

don't forget the orange shag carpets....


I have a project I have been sitting on for two years, I have to make a platform for a shed. Couldn't make up my mind between wood and a concrete pad. Really. Kept debating in my mind. I do have a third alternative, put it on a trailer, but I couldn't find one cheap enough. That would require wood anyway. Harbor Freight has some cheap enough trailers, but they haven't been in stock for two years now.

Guess I am going concrete.
If you wait long enough you'll be gathering river rocks for a foundation... like they did back in the day....
 

gringott

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don't forget the orange shag carpets....



If you wait long enough you'll be gathering river rocks for a foundation... like they did back in the day....

I actually have some flagstones I picked up locally from a stream, it would not be too hard to get enough. I did my culvert ends with them years ago, some left over, I may use them in the concrete pad as filler.
 

BackwardsEngineeer

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Not sure where to drop this gem....
Talking with my SIL this am, he lives in a haughty Tauty neighborhood near Daniel Island here in Charleston. His buddy is building a McMansion 7000 + sq ft on the water. Beautiful lot will have amazing views, room for at least a 45 footer with 13 foot depth at low tide, 25 minutes to open water...

Price per sq ft all built to the max?

$500.. nope but a nice down payment
$600.. nope but you turned the corner into the correct zip code
$700.. getting warm but we really need those upgrades
$823... ding, ding, ding, we have a winner... 5,750,000 plus lot and dock puts us near 8.25m total build out
 

Treasure Searcher

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If these stimulus infrastructure projects are passed, I do not see construction materials going down in price. Contractors will need materials (cement, lumber, etc.) and the material industry will know it. Material suppliers will want to soak those government projects. Where I live, if a contractor does a road restoration for a FEMA project, the gravel price is 3X the regular price. I can see this happening with Biden's government infrastructure projects.
 

gringott

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We are screwed. Back to mud huts.
 

Thecrensh

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If these stimulus infrastructure projects are passed, I do not see construction materials going down in price. Contractors will need materials (cement, lumber, etc.) and the material industry will know it. Material suppliers will want to soak those government projects. Where I live, if a contractor does a road restoration for a FEMA project, the gravel price is 3X the regular price. I can see this happening with Biden's government infrastructure projects.
Of course, and their buddies will get all the contracts...then they will get kickbacks from their buddies.
 

Goldhedge

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Don't know about the rest of you mugs, but if you served your country you can receive a 10% discount on purchases at HD & Lowes...
 

ErrosionOfAccord

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shit damn fuck

I am in the middle of a kitchen remodel

I was going to finance the project be selling a few bits of crypto but noooooooooo , cryptos taking a dump

It’s my double whammy!



View attachment 211384

Just finished mine. I highly recommend you get the large 30” drawers for pots n pans. So much easier to organized them that way.
 

historyrepete

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Went broke remodeling back deck
6x6 cedar post 200 bucks piece composite decking almost 3k cedar mantle buck 50. It's so stupid costly I don't wanna know.
This is over the old cca skirt and joist.
The one time the wife was right was 2 years ago when she said replace the back deck. Could've saved thousands
 

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Goldhedge

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Jim Williams of Shadowstats says 11% inflation is here....

Screen Shot 2021-05-22 at 8.07.22 PM.png
 

gringott

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Don't know about the rest of you mugs, but if you served your country you can receive a 10% discount on purchases at HD & Lowes...

Item that may be of note. Lowes gives the 10% for online purchases with verified status, they put in on your account so you don't have to prove it every time. Last conversation with Home Depot they told me they are trying to implement the same. IDK if it is possible yet. I have got 10% off a HomeDepot online purchase by going into the store and getting the manager to order the item online for me and delivered to me, and then he authorized the price reduction. It was crazy, but it did work. It helps if you present yourself as helpless while wearing a mask.

I hardly ever buy from Lowes any more, so many seconds and poor quality items. Everything from plumbing to fixtures to electrical switches, too many shoddy items. HD is no heaven, but I haven't had the problems I do with Lowes. Just sayin, your mileage may vary.
 

chieftain

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Is timber in the US in actual short supply and the prices are reflective of that? Or are the prices due to profiteering cockwallets?
 

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This fence was blown down next to the house. Damn near a fortune right there in wood! 2x10s, 12' long.

Screen Shot 2021-05-23 at 10.07.56 AM.png
 

Fiat Metaler

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Is timber in the US in actual short supply and the prices are reflective of that? Or are the prices due to profiteering cockwallets?

Prices for logs is relatively unchanged. The chokepoint is the sawmills, who are raking in the money.

Standing timber is up a little over the past year, but we are talking less than 10%. Its the fnished product, lumber, that has skyrocketed, because of the finite sawmill capacity.
 

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Fiat Metaler

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Watched a youtube documentary last night that claimed log prices are flat or down, after adjusting for inflation, the last 20-40 years. Supposedly 20 million more acres of trees have been planted, while mill capacity has declined.

If that's true, then putting a tariff on finished lumber just perpetuates the shortage with no benefit
 

hoarder

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Prices for logs is relatively unchanged. The chokepoint is the sawmills, who are raking in the money.

Standing timber is up a little over the past year, but we are talking less than 10%. Its the fnished product, lumber, that has skyrocketed, because of the finite sawmill capacity.
This ^^^^^
Just prior to the USFS relaxing their logging policies, the well financed went around and bought up most of the struggling independent mills. Perfect timing and I don't think it was a coincidence. I smell banksters.
 

Uncle

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Arbitrage. Start a mill.

Golden Regards
Uncle
 

Goldhedge

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Instrument wood - used for making violins, guitars et al is through the roof. Expensive!

It's not 'construction' materials, but 'special' cuts of wood that show 'flame' or other characteristics.

Typically it is quarter sawn (like a pie) not slab cut. It brings out the vagaries of a particular tree.
 

specsaregood

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I hardly ever buy from Lowes any more, so many seconds and poor quality items. Everything from plumbing to fixtures to electrical switches, too many shoddy items. HD is no heaven, but I haven't had the problems I do with Lowes. Just sayin, your mileage may vary.

I've always found that Lowes has nicer products than HD. But I'll never order anything from Lowes that has to be delivered, In-store purchases only that I walk out of the store with in hand. 2 times now, they cancelled my large item online order/delivery on the scheduled delivery day with no notice whatsoever. I searched online and found it was a common experience. Never again.
 

Fiat Metaler

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This ^^^^^
Just prior to the USFS relaxing their logging policies, the well financed went around and bought up most of the struggling independent mills. Perfect timing and I don't think it was a coincidence. I smell banksters.

Could be.

After Enron, etc. I looked into alternative investments including timber. Learned a great deal. One thing I learned back then was that the value of a stand of timber was proportionate to the distance to the nearest mill, and the more mills the better price the timber would bring. The problem was that mills had been losing money and either consolidating or shutting down.

So there are capacity constraints in the supply chain at the saw mill stage. Those guys are getting a windfall now. I'm hedged for inflation so I'll be OK. Hopefully this is temporary but with government nonsense policies it may just get worse.
 

hoarder

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with government nonsense policies it may just get worse.
Very often, government policies and regulations are written to benefit large corporations at the expense of small companies. Such is the nature of a world where everything is decided behind closed doors under the guise of democracy and transparency.
 

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Two of the large lumber companies mentioned in the video

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