Softwood Lumber Prices Settle as Demands Slackens, US Home Sales and House Prices Strong: April 2019 Français
Apr 04, 2019, 07:00 ET
VANCOUVER, April 4, 2019 /CNW/ - A big surprise unfolded for log and timber suppliers globally when at least one large wood stocking port in China reached almost full capacity in March, according to Madison's Lumber Reporter www.madisonsreport.com, a weekly wholesaler price guide for the North American sawmilling industry. Recent indications out of China show a sizeable drop in log and lumber imports since year-end 2018. Traders report zero ordering and the ports have been choked with wood — some unsold — for at least a month.
"Customers in China won't even take quotes, ports at bursting with stock."
"Inventory build up in China ... 1.7 million cubic metres in Taicang port. Two million cubic metres is like the killing zone, once its reached it will be disaster. Panic mode."– March 20, 2019 — Madison's Lumber Reporter www.madisonsreport.com
Continued soft demand and unenthusiastic customers had North America construction framing softwood lumber prices lower last week, as operators can only wait and see if the usual spring lumber selling will materialize. Monday's data release of improved US construction spending for February and recent data of strong US home sales and house prices has most wood suppliers thinking there is still a good buying season approaching for spring 2019.
Be ahead of these data releases! Don't delay, this week's softwood lumber market comment was published to the website Monday morning.
* Madison's Lumber Prices, weekly, are a good forecast indicator of US home builder's current lumber buying activity ——> DETAILS.
Many players were "frustrated" that dimension lumber sales volumes were lower than expected even as weather in most regions of North America improved with the coming of spring. Sawmills reduced their asking prices more than $20 on some #2&Btr items, finding mild success with selling, and pushing production order files out no more than two weeks.
Link to graph: Average Sales Price of Houses Sold in USA vs Softwood Lumber Prices : 2007 – 2019
The trendlines on these graphs for benchmark softwood lumber commodities Western Spruce-Pine-Fir KD 2x4 #2&Btr prices vs US home sales and house prices are amazingly similar:
Link to graph: New One-Family Houses Sold in USA vs Softwood Lumber Prices
Lumber Prices and US Home Building & Sales Data: February 2019
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.
US housing starts and home sales data plotted against Madison's proprietary lumber prices show a fascinating picture.
Home price gains in the US are about to take off again, said Corelogic Tuesday. The real estate data and analytics company predicts that annual gains in home prices could hit close to +5% by 2020, thanks to falling interest rates.
CoreLogic® Tuesday released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for February 2019, which shows home prices rose both year over year and month over month. Home prices increased nationally by +4% year-over-year from February 2018. On a month-over-month basis, prices increased by +1% in February 2019.
Rising inventory of homes for sale has been helping buyers and making the market slightly more competitive for sellers. The supply is rising fastest, however, at the upper end of the price scale, not at the entry level, where demand is strongest. New home supply on the market reached its highest level in over eight years with higher-priced homes in the Northeast and West accounting for much of the increase, according to Fitch Ratings.
When looking at only the top 50 markets, 40 percent were overvalued, 18 percent were undervalued, and 42 percent were at value.
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.
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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