Friends and Neighbors,
As promised, I am writing to keep you updated on the world of commodity lumber prices. In laymen’s terms, the market is absolutely on fire. Every week, and often multiple times in the week, the print prices are climbing. The notes below come straight from the presses of one of our primary lumber suppliers.
- OSB: All Mills are still off the market. Inventories are very low, and trucking continues to be late!
- Panels: Published pricing was up on all items. Order files the week of 3/5 to 4/2. Pricing is up on everything!!
- Lumber: Up, up, and away!! Way up on all fronts. Stock levels are limited, and mills are on the struggle bus to get loads out.
- Studs: All trims are up again this week in Hemlock and Doug Fir. Order files continue to be 2-4 weeks out.
At this point, print on OSB was high enough that it should be retailing for over $19 per sheet. The last time the market saw pricing this high, was directly following the building boom in 2006 on top of the hurricane Katrina impact. It is early February and much of the country is still in the cold, so we have not seen anything close to peak demand that will come in the spring and summer. As that happens, $23+ per sheet of OSB will be in the market.
Lumber is trading higher now than it was at the height of the building season last August. Extended lead times and escalating prices indicate that real price correction is not in the foreseeable future. Panel inventory is following the same trajectory.
If you are a owner ready to build this year, I would encourage you to ask your builder for an escalation clause in the contract. That gives you a pause button if the increased material cost is crushing your budget. As a builder, having the clause can also help you protect the profitability of your business, by not providing the material cost overruns out of your pocket.
We have invested very heavy in our inventory to try and take away some of the sting of the increasing market. Our goal is to help you ride the storm by having you under our umbrella. As we get closer to re-entering the commodity markets, we will have to follow the market to cover the replacement cost of our more normal inventory volumes. As this happens, we will be sure to keep our communication open so that you are as prepared as possible.
Thanks for following the market with us and please follow our social channels or this blog to stay up-to-date on the weekly, if not daily, changes in the world of commodity lumber.
CEO Lumber Traders Inc.