VANCOUVER, Feb. 7, 2019 /CNW/ - North American construction framing dimension softwood lumber prices shot up spectacularly last week as lean field inventories forced customers to come to the table for large-volume buys.
Immediately at the beginning of January, wholesaler prices of benchmark lumber commodity Western Spruce-Pine-Fir KD 2x4 #2&Btr started rising off full-year 2018 lows, finishing last week at US$404 mfbm, a $58 or +14.4% increase from $346 the week before. At close Monday, lumber futures on the Chicago Mercantile Exchange were US$423, a historically-appropriate $25 premium to cash prices.
WSPF prices jumped significantly while customers' depleted inventories ensured their reluctant continued buying. — Madison's Lumber Reporter www.madisonsreport.com
Canadian and US softwood lumber prices strengthened considerably as end-users found themselves low on inventory for a wide range of products. Sawmills booked production out to four weeks or longer, while secondary suppliers worked to both replenish inventories from last week's buys and book more sales going forward.
The US housing market represents about 15 percent to 18 percent of US GDP, said Lindsey Bell, Investment Strategist at CFRA this week, citing figures from the National Association of Home Builders. In early 2019, the US housing market appeared poised for continued, if somewhat tempered, strength — with a few caveats: the potential for higher interest rates, ongoing home price increases and tight housing supplies, analysts said.
The trendlines on this graph for benchmark softwood lumber commodities Western Spruce-Pine-Fir and Southern Yellow Pine KD 2x4 #2&Btr prices vs US new single-family home sales are amazingly similar:
Lumber Prices and US Home Building & Sales Data: 2018
Most people might not think these two would match, but US Average Home Sales Price also tracks very well against construction framing dimension softwood lumber prices. Remember you don't have to wait two or three months to get an idea of what is happening with the important US real estate market if you are looking at Madison's lumber prices every Friday.
Benchmark lumber commodities Western Spruce-Pine-Fir and Southern Yellow Pine KD 2x4 #2&Btr vs Average Sales Prices for Houses Sold for USA 2007 - 2019
US housing starts and home sales data plotted against Madison's proprietary lumber prices show a fascinating picture.
While the real estate data comes out two or three months later, Madison's North America construction framing dimension softwood lumber prices (wholesale) are released Friday every week.
See for yourself how astonishing the correlation between select US home building and sales data when compared to Canadian and US lumber prices over the past ten years.
The numbers don't lie; the data speaks for itself.
Established in 1952, Madison's Lumber Prices is your premiere source for North American softwood lumber news, prices, industry insight, and industry contacts. The weekly Madison's Lumber Reporter publishes current Canadian and US construction framing dimension lumber and panel wholesaler pricing information 50 weeks a year and access to historical pricing as well.
Madison's offers a variety of products to meet your information needs regarding the North American forest products industry including:
Madison's Lumber Prices: https://madisonsreport.com/products/madisons-reporter/
Madison's Heating Wood Pellet Prices: https://madisonsreport.com/products/madisons-north-american-heating-wood-pellet-price-report/
Madison's British Columbia Coast Log Prices: https://madisonsreport.com/bc-coastal-log-prices/
Madison's Forest Pulse: https://madisonsreport.com/products/forest-pulse/
Madison's Canadian Sawmill Directory: https://madisonsreport.com/products/madisons-directory/
SOURCE Madison's Lumber Reporter
For further information: Keta Kosman, Publisher, Madison's Lumber Prices, est. 1952, Vancouver, BC, Canada, www.madisonsreport.com, 604 319-2266