In a January 22nd post, we asked “Where will the price of 2×4 WSPF #2&Btr be closest to, per Random Lengths Print, on March 28th?
At that time, 2×4 print was $376/M. An overwhelming majority, over 80% of those who responded, anticipated that print would be significantly higher today. Print today sits at $354. At the same time, the Framing Lumber Composite Price has fallen from $403 to $378.
The Random Lengths Weekly Report dated January 24th begins: “The sharp fall in prices during the second quarter of 2013 continues to play a major role in traders’ buying decisions as 2014 gets under way.” While few could have foreseen the impasse in Q1 activity largely attributed to one of the coldest winters on record, the cautionary international outlook outlined by Random Lengths in that same issue, so far, seems prescient:
“North American and overseas traders will look to the U.S. as a key indicator of global prospects in 2014. North American suppliers gained price leverage in offshore markets (last year) as domestic buyers consumed larger volumes, tightening supplies available for export. This trend is most evident in Japan, with Western SPF J-Grade prices shattering records. Demand caught fire, especially in the first half, as builders scrambled to keep pace with a robust housing market. Meanwhile, Canadian producers shipped larger volumes to the U.S., forcing Japanese importers to match those returns.
Japan’s housing market is forecast to cool in 2014, partially because of a coming increase in the country’s consumption tax. The extent to which demand eases from 2013, and the success of government efforts to make the country’s wood products industry more self-sufficient, will determine demand for imported lumber this year.
Demand is expected to remain strong in China, but importers have intensified their search for alternative suppliers as prices of North American stock increase. Competition for Chinese market share will be fiercer than ever in 2014, which could hinder North American suppliers’ efforts to increase shipments.”