Prices for southern yellow pine (SYP) have been rising almost unchecked since the start of the year.
The composite SYP price was about $379/mbf in early January, dipped about $20 in the following couple of weeks, then began climbing. It reached about $430 in early April, dipped again, and rebounded again. By late April it was at about $440.
By contrast, the composite SYP price began last year at a little under $330. By late April of 2016, the price was still under $400. And throughout 2016, there were only a couple of two-week periods when the price exceeded $400.
Lumber prices have risen to a 12-year high, noted a post in Forest2Market, which collects information on prices and markets in the forest products industry.
A milder than normal winter has helped drive prices higher, but a number of other market and trade factors also have combined to escalate prices in the first quarter and into the second quarter.
Prices are being buoyed by a number of trade-related dynamics that are coinciding, according to economists. Of course, one is the recent decision by the White House to impose countervailing duties on softwood lumber imports from Canada.
Other factors include the growing demand for new homes and a spike in remodeling.
The National Association of Home Builders (NAHB) recently noted in an article that rising lumber prices have “been challenging for producers as trading volume slowed. One explanation is that the pricing increase drove many buyers to shift purchases forward to hedge against future price increases.”
“For the time being,” the NAHB article commented, “it looks like mills have largely priced future, retroactive duties into the market.”
If SYP lumber price increases are mostly due to “pre-buying” rather than increased consumer-driven demand, prices could subside later this year, noted Forest2Market.
