Lumber Prices Gain Momentum As Demand Picks Up

SEATTLE (Scrap Monster): The softwood lumber prices, especially those of construction framing dimension items, recorded large improvement from the record lows during end-April this year.

The Western SPF 2×4 prices surged higher by 2% over the prior week during the week ending on May 15, 2020. From the prior month, the prices were up by 14% from $316 mfbm to $360 mfbm. Upon comparison with mid-May 2019 levels, the prices were up by nearly 8%, said Madison’s Lumber Reporter.

The U.S, building permits in April 2020 reported a decline of nearly 21% from the previous month. The U.S. housing starts have dropped by approximately 30%, when matched with the same month a year before. The improvement in U.S. homebuilder sentiments is expected to result in more stability in housing market during May 2020. The recent surge in mortgage applications too is a positive sign for lumber markets.

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Although lumber exports to China have recorded massive increase over the past several years, much of the imports by the country from the U.S. and Canada are low-grade materials. The exclusively premium lumber grades, which are priced higher than standard grades, are mainly exported to Japan.