Back-to-School Market Distractions

We can now add “back-to-school distractions” to the long list of conflicting forces presently shaping lumber markets. According to the Random Lengths Midweek Market Report, “Hot weather, back-to school distractions, and vacations contributed to the lethargic pace” in recent days. Traders likely consider China, multi-family trends in ‘house construction’, abundant global fibre supply, and a weak Canadian dollar to be more impactful factors at the moment.

Even the October 12th expiry of the Softwood Lumber Agreement (SLA) is now in sight. In midst of one of the worst wildfire seasons on record, the Framing Lumber Composite Price has actually drifted lower since peaking in early July. Before the SLA expires, it’s possible that a significantly higher export charge could be triggered for just the first eleven days of October. How might that play out?

Meanwhile, we’re told here “for softwood lumber prices to rise meaningfully, Canada’s lumber industry will have to reduce its current overproduction.” It’s interesting to note that ‘overproduction’ has been one among many characterizations said to have been impacting cyclical lumber pricing patterns over the past 20 years. In today’s post-beetle world, the rationale for perceived “overproduction” strategies among the province’s largest producers is complex, if not confusing to many.

Stoney Lake Lodge 7-28-2015

While fly fishing at Stoney Lake Lodge (27 July 2015) photo credit: ejh

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