Random Lengths North American framing lumber composite climbs US$4 to US$400/mbf despite quieter trading, some price declines; weak close of January futures contract, drop in futures prices to five-week lows, contribute to slowdown in Western SPF trading

Wendy Lisney

LOS ANGELES , January 21, 2013 (Industry Intelligence Inc.) – The Random Lengths North American framing lumber composite has continued to climb despite quieter trading, some price weakness – most notably in Western SPF – and a weak close of the January lumber futures contract.

The composite closed the week ending Jan.18 up US$4 from the previous week at US$400 per thousand board ft. (mbf). Compared to the price at this time last year (283/mbf), the composite is $117 (41.34%) higher.

Western SPF markets were noticeably quieter after Tuesday’s weak close of the January futures contract. Broad commodity gains had helped to push lumber futures higher on Monday, Jan. 14, with January closing up $4.80 at $376.20/mbf, and March settling $6 higher at $386.90/mbf. But on Tuesday, profit-taking and caution about the market in the near-term contributed to a $10 limit-down drop in March futures to $376.90/mbf. The January contract expired down $8.60 from Monday at $367.60/mbf, while May settled $7.50 lower at $374/mbf.

On Wednesday, futures ended slightly lower, extending Tuesday’s declines, before much larger drops on Thursday and Friday. Futures were reported at four-week lows on Thursday with March down $6 from Wednesday at $369.40/mbf and May dropping $5.90 to $366.40/mbf. This extended to five-week lows on Friday, when March dropped $7.10 to $362.30/mbf, May fell $6.60 to $359.80/mbf and July ended the week down $5.50 from Thursday at $354/mbf.

Western SPF sales were particularly slow on Thursday, reported Random Lengths, and reported prices of #2&Btr 2x4 and 2x6 lost $4-5, although some mills tried to hold prices to quoted levels. KD Western SPF #2&Btr 2x4 random finished the week at $383/mbf, down $5 (1.29%) from the previous week but $133 (53.20%) higher than the price reported a year ago of $250/mbf.

Eastern SPF prices moved modestly higher early in the week, but flattened as sales slowed, reported Random Lengths. Most prices either held or edged slightly higher, but cracks started to show in some items – including 2x4 which sold in Toronto at mild discounts.

The reported price of KD Eastern SPF (delivered Great Lakes) #1&2 2x4 random edged $1 (0.21%) higher to $485/mbf – up $143 (41.81%) from the price at this time last year of $342/mbf.

Southern pine #1 and #2 sales were hampered by rain, snow and limited floor stock at sawmills, reported Random Lengths. All items gained over the previous week, but price increases moderated on the slower sales pace, and reduced activity was particularly apparent at Westside mills where orders were well behind production levels. Even so, random #2 prices in that zone gained $6-10 and the reported price of reported price of KD Southern Pine (Westside) #2 2x4 Random closed the week up $10 (2.20%) at $465/mbf – a gain of $154/mbf (49.52%) over the price a year ago of $311/mbf.

Douglas fir prices held firm despite subdued sales, with several producers reporting order files booked into the second week of February, reported Random Lengths. The reported price of Green Douglas fir (Portland Rate) Std&Btr 2x4 advanced $10 (2.90%) higher to a reported $355/mbf on Jan. 18, and was $130 (57.78%) higher than the price reported a year ago of $225/mbf.

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