Random Lengths North American framing lumber composite ends five-week run of price gains with US$1 dip to US$383/mbf on Oct. 11, midweek lift in lumber futures helps offset weakness in Southern pine in week of mixed sales trends

Wendy Lisney

LOS ANGELES , October 13, 2013 (Industry Intelligence) – The Random Lengths North American framing lumber composite ended a five-week run of price gains in the week ending Oct. 11, with a US$1 (0.26%) dip to $383 per thousand board ft. (mbf) – down from $384/mbf in the previous week. Compared to the price at this time last year of $316/mbf, the composite was $67 (21.20%) higher.

The composite has risen for five consecutive weeks from $350/mbf on Aug. 30 to a peak on Oct. 4 of $384/mbf, representing an increase of $34, or 9.71%. Random Lengths noted that the recent gains ensure a zero import tax in November for Canadian shipments to the U.S.

The decline was largely due to uneven trading across framing lumber species, reported Random Lengths. Weakening in Southern pine was offset by firming in some Western SPF prices, supported by strengthening in lumber futures at midweek.

Futures prices were flat-to-down on Monday, Oct. 7, with the November contract dropping $5.40 after opening the week at $334/mbf, and January closing unchanged from an opening price of $342/mbf. But prices strengthened on Tuesday and Wednesday, taking November futures to a settlement price of $338.90/mbf on Oct. 9 and January to $349.30/mbf. Futures prices were generally weaker later in the week, and November dropped $7.40 on Friday to close the week at $331.20/mbf - down $2.8 (0.84%) from Monday’s opening. January futures gained $7.4 (2.16%) on the week, closing at $349.40/mbf.

The lift in futures helped to firm prices of the narrows of #2&Btr random dimension, but Random Lengths noted that buyers and sellers were still looking for a clear direction in the market. Reported prices of 2x4 and 2x6 held to levels reached during the midweek pick-up in sales, and producers that offered small blocks of 2x4 early in the week at discounted prices were on a firmer price footing by Friday.

The reported price of KD Western SPF #2&Btr 2x4 Random dropped $2 (0.56%) from $357/mbf to $355/mbf – but was up $66 (22.84%) from the price reported at this time last year of $289/mbf.

In Eastern SPF markets, trading was uneven and sales were either flat or down, reported Random Lengths. Sales were flat in the Toronto market and slowed in the Northeast, while in the Boston market, buyers paid premiums for prompt shipments.

The reported price of KD Eastern SPF (delivered Great Lakes) #2&Btr 2x4 random held at $455/mbf for a second straight week, after increasing $4 to $455/mbf in the week of Oct. 4. Compared to the year-ago level of $380/mbf, the reported price was $75 (19.74%) higher.

Southern pine markets softened as production outpaced sales, reported Random Lengths. Traders were concerned about downside risk and restricted their purchases to mixed, low-volume loads for prompt shipment to fill inventory gaps. Prices of #2 2x4 showed more price firmness than wider widths, but cracks in pricing developed towards the end of the week as upward momentum slowed.

The reported price of KD Southern Pine (Westside) #2 2x4 random, which advanced $9 in the week ending Oct. 4, ended last week $1 (0.24%) higher at $419/mbf, and was $53 (14.48%) higher than the price reported at this time last year of $366/mbf.

In Douglas fir markets, price softness developed in the narrows of 2 in. dimension while the wides continued to strengthen, reported Random Lengths. Some mills relied on order files and reputations for higher quality to keep quotes on Std&Btr or #2&Btr in the $320s, but some mills reportedly sold as low as $305/mbf.

The reported price of Green Douglas Fir (Portland rate) Std&Btr 2x4 dropped $5 (1.54%) to $320/mbf after holding at $325/mbf in the previous two weeks, but was $58 (22.14%) higher than the price reported a year ago of $262/mbf.

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