Homeowners and renovators wishing for a winter slump in prices are alternatively facing the stark reality of all-time record high pricing for both lumber and oriented strand board (OSB).
Western SPF (spruce, pine, fir) lumber prices rose to a four-digit close for the first time on Tuesday, reaching a whopping $1,000 US per thousand board feet (MBF), according to a report from CIBC analyst Hamir Patel, who cited market watcher Random Lengths.
"The trade magazine pointed to a moderation in sales pace due to cold weather, but prices continued to trend higher," Patel wrote.
"Mills also had difficulty shipping orders given the snow and cold temperatures, while heavy rain hampered logging in some regions. The North American composite lumber price rose about one per cent to an all-time high of $979 US, he added.
Benchmark pricing for the North Central region for OSB panels reached a record of $848 US per thousand square feet, as OSB pricing in Western Canada reached its own all-time high of $870 US.
Producers and consumers alike are affected by these record high prices.
Last week, Louisiana-Pacific Corp. announced a plan to resume production at the Peace Valley OSB Mill in Fort St. John, B.C., which was closed down in 2019 due to extremely low prices, costing just about 200 jobs.
"Long-term demographic data and a structural undersupply of housing suggests continued tailwinds for demand. As a result, we have begun the process to restart production of OSB at Peace Valley," explained Chairman and CEO, Brad Southern.
In a recent report by RBC, analyst Paul Quinn said North American softwood lumber production saw an increase of 7,2 percent this past November, compared to the same month in 2019. Consumption rose by almost 15 percent he added.
"We expect that producers were running their mills near capacity as they attempted to take advantage of extremely strong pricing levels," he said, citing Western Wood Products Association statistics.
"We are now re-entering the spring building season where demand tends to peak. Buyers are covering their immediate needs while building up their inventories; however, producers are facing tight conditions with order files booked through March." November production increased by 8.2 per cent to about 2.9 billion board feet in the U.S. as Canadian production increased 5.9 per cent to approximately two billion board feet.