While supply chain disruptions arising from wildfires were not the primary driver behind June’s bullish sentiment for softwood, the psychological impact of uncertainty lingers as crews battle July fires in the forests. Lumber prices have jumped in the past month, as wildfires in Canada raise concerns about supply disruptions while healthy U.S. housing starts boost the demand side. Cash prices – what sawmills charge wholesalers – have climbed 22 per cent since June 1. They settled last week at US$420 for 1,000 board feet of two-by-fours made from Western spruce, pine and fir (SPF).
The wildfires in Canada have created a sense of unease in the lumber market, as the potential for supply disruptions looms. Although these disruptions were not the main reason for the bullish sentiment in June, the uncertainty caused by the fires continues to have a psychological impact. As firefighting crews battle the fires in the forests, the industry is closely monitoring the situation.
In addition to the wildfires, the demand for softwood has been boosted by healthy U.S. housing starts. With more people looking to build new homes, the demand for lumber has increased, further driving up prices. This combination of supply concerns and strong demand has led to a significant jump in cash prices.
Since June 1, cash prices for softwood lumber have risen by 22 per cent. Sawmills are now charging wholesalers around US$420 for 1,000 board feet of two-by-fours made from Western spruce, pine, and fir (SPF). This substantial increase in prices reflects the current market conditions and the challenges faced by the industry.
The wildfires in Canada have been a cause for concern in the lumber market. The potential for supply disruptions has led to uncertainty and increased prices. However, it is important to note that the wildfires were not the main driver behind the bullish sentiment in June. Other factors, such as strong demand from the housing sector, have also contributed to the rise in prices.
The housing market in the United States has been robust, with a high number of housing starts. As more people look to build new homes, the demand for lumber has surged. This increased demand, coupled with the supply concerns caused by the wildfires, has created a perfect storm for rising prices.
In conclusion, while the wildfires in Canada have had a psychological impact on the lumber market, they were not the primary driver behind the recent surge in prices. The combination of supply disruptions and strong demand from the housing sector has led to a significant increase in cash prices. As the industry continues to monitor the situation and firefighting crews work tirelessly to control the fires, the market remains uncertain. However, it is hoped that stability will return in the near future.
