Random Lengths North American framing lumber composite edges US$1 lower to US$387/mbf in week ending March 14; some Western SPF mills consider shutdowns as truckers' strike at Port Metro Vancouver in British Columbia impacts supply chain

Wendy Lisney

LOS ANGELES , March 16, 2014 (Industry Intelligence Inc.) – The Random Lengths framing lumber composite dropped US$1 (0.26%) to $387 per thousand board ft. (mbf) in the week ending March 14, and was $45 (10.42%) lower than the price reported at this time last year of $432/mbf, Random Lengths reported on March 14 in its weekly lumber market report.

Sales and price trends were mixed during the week as traders continued to face weather-related and transportation challenges, reported Random Lengths. A storm in the Midwest, Northeast and Eastern Canada further delayed any hopes of a spring pick-up, while the truckers’ strike at Port Metro Vancouver in British Columbia continued, blocking Asia-bound lumber shipments.

On March 13, Industry Intelligence reported that lumber was stacking up at Conifex Fibre Marketing Inc.'s sawmills in Fort St. James and Mackenzie. A Conifex spokesman said about 40-50% of its product was shipped offshore via the port’s container terminals, and Conifex and other companies were reported to be seeking alternative terminals in Seattle and Tacoma, Washington.

Chris Sainas, president of the B.C. Wholesale Lumber Association, said the strike was affecting the entire North American lumber supply chain. He noted that CN Rail had informed forestry customers that it was closing its reloading and distribution centre in North Vancouver to new deliveries because of the build-up of export inventories.

On March 14, the province announced a 14-point action plan to end the dispute and return the port to normal operations. Lisa Raitt, Minister of Transport, said she had asked the port to implement the plan and expected the trucking industry to return to work immediately. In a statement, the government said the plan would ensure truck drivers were paid fair compensation and introduce pilot measures to reduce wait times at container terminals.

In Western SPF markets, a sharp drop in futures prices on Thursday, combined with the rail and port difficulties, led some mills to consider temporary shutdowns. Sales showed a modest pick-up from midweek, and prices of the narrows of #2&Btr random dimension edged higher as mills quoted shipments – subject to car availability – for late March or early April, reported Random Lengths. Warmer weather also helped to lift demand in some markets, but other regions remained quiet – particularly the Mid-west.

The reported price of KD Western SPF #2&Btr 2x4 advanced $5 (1.38%) to $368/mbf, but was $40 (9.80%) lower than the price reported at this time a year ago of $408/mbf.

Futures followed a downward path from Tuesday, March 11, with the steepest drops seen on Thursday, when May futures slipped $5.80 to settle at $350.50/mbf and July ended $4.80 lower at $353.90/mbf. March edged $0.80 higher on the day to close at $360.30/mbf.

For the week as a whole, March lost $6.70 (1.85%) from Monday’s opening price of $362.70/mbf, closing on Friday at 356.00/mbf. May opened at $359.10/mbf and closed $18.60 (5.18%) lower on Friday at $340.50/mbf.

Some buyers seeking quicker and more reliable deliveries preferred to divert their business to Eastern SPF mills, and producers were able to firm prices. Random Lengths noted that buyers in the U.S. were notably more active than those in Canada, and Canadian mills based quotes on their side of the border on U.S. sales returns.

The reported price of KD Eastern SPF (delivered Great Lakes) #2&Btr 2x4 random moved $6 (1.35%) higher to $451/mbf, but was down $47 (9.44%) from the price reported at this time last year of $498/mbf.

Southern pine sales were inconsistent, and prices shifted in both directions. Traders serving customers in the Upper Midwest and Northeast continued to wait for the weather to improve, reported Random Lengths, while some buyers worked through inventory purchased in February. Occasional double-digit discounts were reported in the narrows of #1 and #2 as mills worked to clear accumulations.

The reported price of KD Southern Pine (Westside) #2 2x4 edged $2 (0.48%) lower to $417/mbf from $419/mbf – and was down $51 (10.90%) from the price reported at this time last year of $468/mbf.

Douglas fir producers lowered quotes aggressively to clear accumulations of Std&Btr and #2&Btr 2x4 at Portland-rate mills, Random Lengths reported, and some producers offered counters of $10-20 in their efforts to attract buyers. #1&Btr 2x4 was also cut by double digits, finishing at $400/mbf,with the cuts enabling most mills to move their floor stock.

The reported price of Green Douglas fir (Portland rate) Std&Btr 2x4 plunged $15 (3.85%) to $375/mbf, and was $10 (2.60%) lower than the price reported at this time last year of $385/mbf.

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