Random Lengths North American framing lumber composite drops US$9 to US$331/mbf in week ending June 14; lumber futures prices hit two-week lows as July contract drops to US$283.60/mbf
June 16, 2013
– The Random Lengths North American framing lumber composite continued its decline in the week ending June 14, falling by US$9 (2.65%) to US$331 per thousand board ft. mbf) from $340/mbf in the previous week. Compared with the price reported at this time last year of $334/mbf, the composite is $3 (0.90%) lower.
Momentum from stronger prices in the week ending June 7 did not carry evenly into last week, and most prices finished lower, as buyers’ concerns that the market was oversupplied increased. In the West, reports of curtailments circulated, but were unconfirmed, reported Random Lengths.
Western SPF prices weakened on quiet sales, and 2x4 quotes were reported below $300/mbf, although a wide range of $298-$316/mbf developed late in the week.
The reported price of KD Western SPF #2&Btr 2x4 random dropped $4 (1.30%) to $303/msf, and was also $4 below the price reported at this time last year of $307/mbf.
Sharp declines in lumber futures during the week of June 14 kept buyers on the sidelines, and a report by TD Economics that prices will increase 30% by the end of 2013 to reach multi-year highs did little to restore their confidence.
On June 12, futures closed limit-down in most contracts as prices in all 2103 contracts dropped below the $300/mbf mark. Cash quotes dropped $5 from early week levels to $295-$300/mbf as traders continued to worry about the cash market’s near-term outlook at a time of increasing production and declining export sales.
Prices fell further on Thursday and Friday to close the week on June 14 at two-week lows, with the July contract down 8.2% on the week at $283.60/mbf. September settled at $287.00/mbf on Friday, taking both contracts to their lowest levels since hitting contract lows on May 29. Dow Jones noted that cash prices were down $5-10 from the previous week, with brokers expecting some mills to sell at even lower prices to keep the wood moving.
in Eastern SPF markets, there was little follow-through from the pick-up seen in the previous week and many producers opened to $5-$10 counters, reported Random Lengths. The reported price of KD Eastern SPF (delivered Great Lakes) #2&Btr 2x4 random dropped $8 (1.97%) to $399/mbf – down $5 (1.24%) from the price reported at this time a year ago ($404/mbf).
Southern pine production continued to outpace demand, and buyers retained their cautious and conservative approach to the market, reported Random Lengths – although truck shortages encouraged some customers with low inventories to reduce their reliance on prompt shipments. Discounts on the westside encouraged some mills in the central zone to accept counters for 2x8 and 2x4, and there were reports of firming 2x4 prices along the eastern seaboard.
The reported price of KD Southern Pine (Westside) #2 2x4 random dropped $8 (2.32%) to $337/mbf, and was $9 (2.60%) lower than the price reported at this time last year of $346/mbf.
In Douglas fir markets, rumors of curtailments circulated as downward price pressure on the narrow widths increased, reported Random Lengths. Some mills were understood to be considering downtime around the July 4 holiday, but no official announcements were made. Prices of Std/#2&Btr 2x4-2x8 fell $23-30 at Portland-rate mills, and most traders reported sales of Std&Btr 2x4 at $270/mbf.
The reported price of Green Douglas fir (Portland Rate) Std&Btr 2x4 dropped $27 (9.15%) to $268/mbf from $295/mbf in the week before, but was $28 (11.67%) higher than the year-ago level of $240/mbf.