Market Update - Questions Answered

Two questions were answered last week. Is there enough demand to sustain this Bull run and can the mills continue to raise prices. The answer to both questions, was yes. The market spring back to life early in the week after buyers realized prices had bottomed.  Prices of all major species in dimension lumber increased with SPF studs, SYP 2x10 and 2x12 being the  most active. Mills were able to raise prices at will most of the week and order files were extended into late March, on many items. The Futures market had one of its best weeks ever, with four limit up days. Most agree that the F.O.B. mill price of Western SPF 2x4 will reach the $400 level soon.

The panel market kicked in as well. OSB mills experienced strong sales early in the week and by Friday many had gone off the market. Some wholesalers in the south, sold out of OSB and were not even able to quote loads for future shipment. The mills are firmly in control of the market for now, knowing that things will change in the coming months, when three new OSB mills begin to produce and sell inventory. Until then, they are in the drivers seat.

To summarize the situation is simple. Prices will continue to rise until the demand has been met. Business is better than anyone wants to admit. Everyone we talk to, has had nothing but positive things to say about the industry, both single family and multi-family. If the housing market continues to improve and the mills can’t produce enough then these higher prices will be with us for most of 2013.