Random Lengths framing lumber composite holds at US$399/mbf for second straight week on Nov. 22 as sales activity slows unexpectedly ahead of US Thanksgiving week, some mills open to counters as stock accumulations develop

Wendy Lisney

LOS ANGELES , November 24, 2013 (Industry Intelligence) – The Random Lengths framing lumber composite held at US$399 per thousand board ft. (mbf) in the week ending Nov. 22 as sales activity slowed and some mills opened to counters. Compared to the price reported at this time last year of $355/mbf, the composite was $44 (12.39%) higher.

The more measured pace ahead of Thanksgiving week in the U.S. took some mills by surprise. Mills with order files stretching into the week of Dec. 9 and 16 took a firm stance on price, reported Random lengths. Others took the view that current price levels generated good returns, and they were willing to negotiate on price to bolster order files or reduce accumulated stock.

In Western SPF markets, trading slowed and some weakness in pricing developed. Random Lengths noted reports circulating that one producer sold a block of #2&Btr 2x4 and 2x6 at discounted levels, while other mills reduced quotes into the low- to mid-$380s.

The reported price of KD Western SPF #2&Btr 2x4 random dropped $3 (0.78%) to $382/mbf, and was $46 (13.69%) higher than the price reported this time last year of $336/mbf.

Lumber futures were generally on a downward trend during last week after gaining on Monday, Nov. 18, by up to $4 on the day. The January contract opened the week at $363.80/mbf and closed at $359.60/mbf on Friday – a decline of $4.20 (1.15%) on the week. March, which opened on Monday at $367.50/mbf lost $3.90 (1.06%) on the week, closing on Friday at $363.60.

Sales of Eastern SPF were uneven, with some buyers taking a cautious approach to adding inventory ahead of the U.S. holiday, reported Random Lengths. Mills selling into the Boston market lifted quotes modestly after sales picked up early on, although demand had fallen back by Thursday. Prices finished narrowly mixed on Friday after some mills opened to counters of up to $5 late in the week.

The reported price of KD Eastern SPF (delivered Great Lakes) #2&Btr 2x4 random, which increased $2 in the week of Nov. 15 to $476/mbf, held at that price for a second consecutive week, and was $46 (10.70%) above the year-ago price of $430/mbf.

Sales of Southern pine also moved narrowly in both directions, reported Random Lengths. Many buyers were cautious as they had already addressed their near-term needs and preferred to concentrate on filling small gaps in their inventories with highly-specified loads. Some mills on the westside opened counters to clear accumulations.

The reported price of KD Southern Pine (Westside) #2 2x4 random, which advanced $7 in the week ending Nov. 22 to $434/mbf, edged down $1 (0.23%) to $433/mbf, but was $18 (4.34%) lower than the price reported at this time last year of $415/mbf.

In Douglas fir markets, prices of most items held to the level of the previous week, although sales of Std/#2&Btr dimension slowed at Portland-rate mills, reported Random Lengths. Discounts were occasionally reported on the narrow widths, particularly 2x4, but most producers with long order files held to quoted levels.

The reported price of Green Douglas Fir (Portland rate) Std&Btr 2x4 dropped $2 (0.58%) to $340/mbf from $342/mbf in the previous week, but was $57 (20.14%) higher than the price reported a year ago of $283/mbf.

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