The plunge in North American structural lumber prices and the lack of a rebound in sight has caught many people by surprise reports International Wood Markets (IWM). There are several reasons for this, but the short-term crisis is mainly the result of U.S. demand, weak export markets and expanding lumber output. Below are some of the key drivers that may not get resolved anytime soon!<\/p>\n
China Market \u2014 Supply\/Demand:<\/strong><\/p>\n U.S. Market \u2014 Supply\/Demand:<\/strong><\/p>\n The U.S. market is back to a situation seen often before: too much supply chasing too little demand, says IWM in its report. Chinese and U.S. demand have been especially soft, impacting prices. For the first time in a few years, it is SPF lumber that looks particularly weak: without an opportunity to move incremental lumber outside North America, it will be a grind trying to push more volume into an oversupplied U.S. market. Canadian mills are still making money for now, but are temporarily hampered in terms of where they can ship lumber. And, with the luxury of a currency advantage, there is little likelihood that SPF mills in Canada will shut down this quarter (as is expected at higher-cost U.S. mills, particularly in the West) to help balance the market, says IWM.<\/p>\n Due to the new supply\/demand dynamics, IWM is now forecasting subdued lumber prices in the U.S. for the rest of 2015, with Canadian duties on U.S. exports probable for most (if not all) months until October (when the SLA is set to expire)! Without a quick rebound in China or sustained 15% annual growth in U.S. housing starts each month, it going to be messy for quite some time to come.<\/p>","protected":false},"excerpt":{"rendered":" The plunge in North American structural lumber prices and the lack of a rebound in sight has caught many people by surprise reports International Wood Markets (IWM). There are several reasons for this, but the short-term crisis is mainly the … Continue reading \n
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