US softwood lumber prices drop in mid-November

November 17, 2015
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The framing lumber composite’s six week price run came to an end in the week of Nov. 13 with a US$5 (1.51%) drop to $326 per thousand board ft. (mbf), reflecting a slowdown in framing markets which led to price softening, reported Random Lengths. Compared to this time last year ($367/mbf), the composite was down $41 (11.17%).

The approaching holidays, buyer caution and Friday’s close of the November futures contract were among reasons cited for the slowdown, reported Random Lengths. After gaining for the first three days of the week, November futures dipped slightly on Thursday and dropped $4.70 on Friday to close at $251/mbf – up $3.90 (1.58%) from Monday’s opening price of $247.10/mbf. January futures lost $3.20 (1.30%) over the week as a whole, closing at $243.10/mbf after opening the week’s trading at $246.30/mbf.

In last week’s SPF trading, sales slowed as buyers worked through inventories purchased in October, reported Random Lengths. Some mills held to quotes on #2&Btr citing order files booked into the week of Nov. 23, but found little support. Prices softened as wholesalers undercut mill quotes and traders withdrew to watch price developments as the expiration of the November futures contract approached.

Sales of 2x4 were reported in a $252-255/mbf range, although mill quotes were generally around $260/mbf and higher. The reported price of KD Western SPF #2&Btr 2x4 random dropped $8 (2.99%) to $260/mbf, and was $74 (22.16%) below the price reported at this time last year of $334/mbf.

Eastern SPF prices slipped, particularly in the Great Lakes market, reported Random Lengths. Buyers withdrew after a spate of buying in the October rally, but most producers continued to quote at the previous week’s levels – although many were prepared to consider single-digit discounts. The reported price of KD Eastern SPF #2&Btr 2x4 random (delivered Great Lakes) fell $8 (2.13%) to $367/mbf from $375/mbf in the previous week, and was down $61 (14.25%) from the price reported at this time a year ago of $428/mbf.

In Southern pine trading, prices fell more sharply as demand faded and buyers focused on reducing inventories, reported Random Lengths. #2 2x4 was more readily available at mill level, and some buyers were willing to purchase this width from inventories near previously published levels, although treaters took a more cautious approach. The reported price of KD Southern Pine (Westside) #2 2x4 random, which climbed $11 in the previous week, slipped $1 (0.24%) to $415/mbf, and was $1 (0.24%) lower than the price reported at this time last year of $416/mbf.

Douglas fir sales were slow and prices were mixed, with Std/#2&Btr dimension under increased downward pressure. Random Lengths noted that the slow sales pace led some producers to accept small counters, but most buyers retreated. Portland-rate mills generally restricted discounts to single digits, but cuts of $10 or more were reported on #2&Btr 2x10, while 2x4 was vulnerable to counters in #1&Btr, Std&Btr and #2&Btr.

The reported price of green Douglas fir Portland-rate Std&Btr 2x4 slipped $3 (0.97%) lower to $307/mbf, but was up $7 (2.33%) from the price reported at this time last year of $300/mbf.

Nov 13
Last Week
Nov 6
Year Ago
Random Lengths Framing Lumber Composite Price* $326 $331 $367
KD Western S-P-F #2&Btr 2x4 R/L Mill Price 260 268 334
KD Eastern S-P-F #1&2 2x4 R/L, delivered Great Lakes 367 375 428
Green Douglas Fir Std&Btr 2x4 R/L (Portland) 307 310 300
Southern Pine (Westside) #2 2x4 R/L 415 416 416
KD Coast Hem-Fir #2&Btr 2x4 R/L 323 323 340
Ponderosa Pine (Inland) #2&Btr 1x12 R/L 660 660 675
* Weighted average of 15 key items