Random Lengths framing lumber composite slips US$1 to US$381/mbf on May 30 as market fails to pick up after holiday weekend; month-end discounts, weakness in lumber futures contribute to downward price pressure
June 1, 2014
(Industry Intelligence Inc.)
– The Random Lengths framing lumber composite dropped US$1 (0.26%) in the week ending May 30 to $381 per thousand board ft. (mbf), but was up $33 (9.48%) from the year-ago price of $348/mbf, reported Random Lengths in its weekly lumber market report.
For May as a whole, the lumber composite averaged $378/mbf, up $13 (3.56%) from the average in April of $365/mbf, and $6 (1.61%) higher than the average price in May 2013 of $372/mbf, according to Random Lengths data. The yearly average for 2013 was $384/mbf – up $62 (19.25%) from the average in 2012 of $322/mbf.
Futures generally declined in small increments throughout the week, with the exception of Wednesday, May 28, when prices fell more sharply. The biggest decline was seen in the July contract, which dropped $4.90 to close at $312/mbf, while the September contract slid $3.90 to $317.40/mbf. For the week as a whole, July, which opened on May 27 at 317.90/mbf, dropped $5.60 (1.79%) to settle on Friday at $312.30/mbf. September opened the week’s trading at $324.30/mbf and closed $11.80 (3.78%) lower at $312.50/mbf.
Western SPF prices weakened as mills took an aggressive approach to finding trading levels on #2&Btr narrows, reported Random Lengths. Notable weakness was seen in 2x4 prices, with some sales reported at $320/mbf or lower, while other mills quoted at around $340/mbf and listened to modest counters. 2x6 generally sold in the $320s with a few reports of sales at below the $320/mbf-mark.
The reported price of KD Western SPF #2&Btr 2x4 plunged $19 (5.48%) to $328/mbf after holding at $347/mbf in the two previous weeks, but the reported price was $30 (10.07%) higher than the level at this time a year ago ($298/mbf).
Eastern SPF prices also softened as buyers retreated to the sidelines, reported Random Lengths. Demand was steady in Canadian markets but was not strong enough to match production. Mills occasionally opened to mild counters, but generally held to quoted levels because, with shipping issues adding about two weeks to delivery times, they were unable to ship loads promptly. Aggressive price offerings from Western SPF producers in eastern markets contributed to the downward price pressure.
The reported price of KD Eastern SPF (delivered Great Lakes) #2&Btr 2x4 random dropped $9 (2.05%) to $431/mbf – up $22 (5.38%) from the price reported at this time a year ago of $409/mbf.
Sales and price trends were mixed in Southern pine markets, reported Random Lengths. Some traders reported a pick-up in momentum after a slow start to the week, while treaters generally reported good business on Tuesday as retail stores restocked after the Memorial Day holiday weekend, leading to replenishment buying on Wednesday and Thursday.
The reported price of KD Southern Pine (Westside) #2 2x4 random climbed $5 (1.25%) to $406/mbf, and was $46 (12.78%) higher than the price reported at this time a year ago of $360/mbf.
Douglas fir sales remained quiet in the holiday-shortened week, and Portland-rate mill responded by lowering quotes and listening for counters on all widths of Std/#2&Btr dimension, reported Random Lengths. Some double-digit price cuts were reported, but discounts were generally mild. Month-end discounting added to price weakness, and the reported price of green Douglas fir Std&Btr 2x4 dropped to its lowest level since mid-September of $315/mbf, down $5 (1.56%) from the previous week but $10 (3.28%) higher than the price reported a year ago of $305/mbf.
For May as a whole, the lumber composite averaged $378/mbf, up $13 (3.56%) from the average in April of $365/mbf, and $6 (1.61%) higher than the average price in May 2013 of $372/mbf, according to Random Lengths data. The yearly average for 2013 was $384/mbf – up $62 (19.25%) from the average in 2012 of $322/mbf.Weakness in futures continued in the week ending May 30, and buyers remained cautious, citing month-end discounting, transport issues and wide price spreads between species.