North American softwood timber prices continue to climb, demand tempers

The latest U.S. and Canadian home building, sales, and prices data has shown remarkable — indeed record-breaking — activity, with absolutely no signs of slowing down. In fact, the business of real estate across North America can truthfully be described as “red hot”.

Another notable development this year is an early, and so far quite severe, storm season in the U.S. If this continues through autumn, as many experts say it will, plywood demand for repairs and reconstruction will be very strong. Even if dimension timber prices moderate downward to more “normal” levels, it is possible that panel (Plywood and Oriented Strand Board) will reach new price highs.

For the week ending August 28, 2020, prices of standard construction framing dimension softwood timber items continued to rise, achieving levels beyond the scope of rational imagination. Benchmark softwood timber item Western S-P-F 2×4 #2&Btr KD price gained another +90, or +11 per cent, to US$940 mfbm (net FOB sawmill), from an already remarkable U.S.$850 the previous week. The price for this timber commodity was up +$320, or +52 per cent, from one month ago. Compared to the same week in 2019, when this item was selling for U.S.$370 mfbm, it is up +$570, or an astonishing +154 per cent.

Far surpassing anything previously seen, last week’s Western S-P-F 2×4 price increased by +$506, or +117 per cent, relative to the one-year rolling average price of US$434 mfbm and was up +$538, or +134 per cent, compared to the two-year rolling average prices of U.S.$434 mfbm.