Benchmark Lumber Prices Set a New Record

SEATTLE (Scrap Monster): The Southern Yellow Pine (SYP) lumber prices set a new record. The composite price for the week ending mid-August was $798/MBF, higher by nearly 40%, compared with the previous high recorded in June 2018. The benchmark softwood lumber products prices reported significant surge in the western regions as well, in accordance with latest Madison’s Lumber Reporter.

The surge in lumber prices is mainly driven by strong U.S. housing market. The housing starts, which were down almost 30% in April this year due to lockdown, rebounded during the months of May and June. The annual rate has surged higher from around 891,000 units in April to almost 1.2 million units in June. The extremely robust demand from remodel sector too played a key role in high lumber prices. The remodeling market conditions continue to remain strong, as is indicated by the NAHB Remodeling Market Index (RMI).

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The capacity adjustments on account of the pandemic restrictions resulted in lesser output by lumber mills. The Canadian lumber shipments to the U.S. recorded 20% decline. The U.S. lumber output too declined. The shortage of lumber availability led to sudden surge in prices, as demand remained modest.

In addition, market speculation and ongoing volatility and uncertainties in market contributed to strong lumber prices.