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The North American softwood lumber markets have shown signs of stabilizing after experiencing extreme volatility in 2021 and 2022. Recent price increases have been observed for Western spruce-pine-fir (SPF) lumber, reaching US$446 per thousand board feet. This development is expected to benefit sawmills in British Columbia (B.C.), which have faced challenges such as high operating costs and a diminishing supply of affordable timber, leading to temporary curtailments or permanent closures.<\/p>\n
The mills that have slowed down or undergone curtailments are expected to gradually resume operations, resulting in fewer instances of curtailments compared to the past year. Lumber prices surged during the pandemic, driven by increased demand for remodeling, renovations, and a surge in the new housing market. However, these price increases occurred amid supply challenges, including a dwindling fiber supply in B.C. and rising operating costs.<\/p>\n
Record-breaking lumber prices were observed, with Western SPF reaching all-time highs of US$1,600 per thousand board feet in 2021 and near records of US$1,410 per thousand board feet in 2022. It's worth noting that B.C. sawmills may have received high prices for their lumber, but the overall volume of lumber produced may not have been significant.<\/p>\n
When lumber prices underwent correction last year, the decline was sudden and sharp, dropping below previous levels. Rising interest rates aimed at curbing inflation have contributed to a cooling of housing prices. However, new housing starts have been on the rise, indicating fundamental demand for new homes driven by the millennial demographic.<\/p>\n
Recent data for new housing starts in the U.S. in May shows a 22% increase from April and a 6% increase from May 2022. The demand for new homes, particularly among millennials entering the first-time homebuyer market, is a significant driving force in North America, especially in the U.S.<\/p>\n
Although external factors like wildfires or labor disputes, such as the ongoing strike at B.C. ports, can impact lumber markets, there is a general sense of returning normalcy in terms of lumber demand and prices. Analysts are examining the market to determine the new normal level for lumber demand and prices.<\/p>","protected":false},"excerpt":{"rendered":"
The North American softwood lumber markets have shown signs of stabilizing after experiencing extreme volatility in 2021 and 2022. Recent price increases have been observed for Western spruce-pine-fir (SPF) lumber, reaching US$446 per thousand board feet. This development is expected … Continue reading