Random Lengths North American framing lumber composite climbs US$6 to US$340/mbf, but note of caution enters market as traders assess high prices, seasonal price trends
August 18, 2012
(Industry Intelligence Inc.)
– The Random Lengths North American framing lumber composite advanced US$6 (1.80%) in the week ending Aug. 17, reaching $340 per thousand board ft. (mbf), despite apprehension about the higher prices and seasonal price trends on the part of some buyers. The composite is $78 (29.77%) higher than the price reported at this time last year of $262/mbf.
The pace of trading was moderate in Western SPF markets, but this did not deter traders from keeping upward pressure on prices, reported Random Lengths. The reported price of KD Western SPF #2&Btr 2x4 gained $6 (1.94%) to reach a reported price of $315/mbf on Friday, up $90 (40%) from the reported at this time last year of $225/mbf. Late in the week, quotes on 2x4 ranged from $314 to the $320s.
Lumber futures prices reached new highs on Wednesday, but dipped on Thursday in what one trader described as a corrective market downturn. September reached an 11-month high of $315/mbf and November hit the highest point in the life of the contract at $305.90/mbf.
Prices fell back on Thursday on profit-taking and an unexpected decline in July housing starts. The data, released on Wednesday, showed a 1.1% drop from June to a seasonally adjusted annual rate of 746,000 units – although building permits reached the highest level since Aug. 2008, climbing 6.8% from June to an annual rate of 812,000 units.
September lumber futures dropped $6.30 to $308.70/mbf and November closed down $2.50 at $303.40/mbf. Cash prices were reported in a $310-$312 range. On Friday, futures closed flat-to-weaker on profit-taking and limited buying interest, with September finishing the week at $308.70/mbf and November unchanged from Thursday at $303.40/mbf. Cash prices ranged from $310 to $315/mbf, reported Dow Jones.
Eastern SPF sales were steady, and prices generally moved higher although there were signs of a more moderate pace from Thursday. Many mills were booked into the week of Sept. 3, reported Random Lengths, although the strength of the Canadian dollar impacted Canadian mills’ sales to the U.S.
The reported price of KD Eastern SPF (delivered Great Lakes) #1&2 2x4 edged $1 (0.24%) higher after holding at $409/mbf in the previous two weeks, and was $92 (28.93%) higher than the price reported at this time last year of $318/mbf.
Price trends were mixed In Southern pine markets according to item and producing region, reported Random Lengths. Most traders reported sales ahead of levels at this time last year, and reported price of KD Southern pine (Westside) #2 2x4 gained $8 (2.36%) to a reported $347/mbf. This was $79 (29.48%) higher than the price reported at this time a year ago of $268/mbf.
Upward price pressure continued in Douglas fir markets, although some traders reported a fall-back in phone enquiries and increased caution among their customers. Mill order files were generally booked through to the end of the month, reported Random Lengths.
The price of green Douglas fir (Portland rate) Std&Btr 2x4 was $318/mbf - up $16 (5.30%) from $302/mbf in the previous week, and $73 (29.80%) higher than the price reported at this time a year ago of $245/mbf.