Posted by Forest2Market.com
For some time now, the North American lumber market has been awaiting the “perfect storm” that took shape in 2017. The convergence of three major market dynamics—a lack of timber in Western North America due to the mountain pine beetle outbreak, new trade duties placed on Canadian lumber imports into the US, and a housing market strong enough to demand over 51 billion board feet of lumber in 2018—has caused supply constraints and driven lumber prices to new highs. While prices may subside and find equilibrium as we head into the spring season, supply levels continue to be a concern.
As we noted last month, Forest2Market’s southern yellow pine lumber composite recently hit its highest level ($450/mbf) since we began compiling the data over eight years ago. But the metric continues to push even higher; after cresting the $450/mbf mark, prices spiked to nearly $490/mbf in early March.