The latest US housing starts data showed continued improvement. Such a strong end to what turned out to be a pretty good year for North American construction framing dimension softwood lumber prices – after a terrifying start – bodes well for 2020, according to the Madison’s Lumber Reporter. Source: Lesprom
This Friday will be the last update for the year, and Madison’s is advising that lumber sales will start out hot right at the beginning of January 2021.
At this moment, Canadian and US sawmills are reporting they are holding off booking new sales until January, just to maintain current price levels. If the customer tries to counter-offer at a lower price, they are quoted for January delivery.
US housing starts data encouraging upward trend continues, which admittedly surprised many analysts, beyond 3Q this year.
Builders, realtors, banks, and other experts noted last month that if US home building activity improved again for November, that would carry through to next year. Given the brutal end to last year and horrifying drops in lumber prices to 1H 2019, lumber producers have maintained caution and not built up lumber inventory.
Log supplies across the continent, however, are literally bursting. This is the very best combination for sawmill’s year-end: lumber yard empty, log yard jammed.
For their part, similarly, reloads, wholesalers, and secondary suppliers have also not been building lumber inventory. Players remain cautious, especially given the massive amount of sawmill closures over this year. Sentiment among customers that prices might go down stubbornly persists.
