Lumber Market Report, News, V6I4

Extreme Imbalances

(Photo courtesy of Keith Syvinski on

More turmoil and volatility in lumber prices resulted from the effects of the continued coronavirus/COVID-19 pandemic. 

The lumber market continued to reveal extreme imbalances. SPF and SYP traders noticed that mill shutdowns during the virus outbreak were now having their full impact, just as we headed into the building season. 

Lumber prices spiked higher as we experienced uncertain lumber supplies amid an economy trying to quickly rebound from a recession. 

Let us examine the positive and negative factors, followed by our forecast.


The good news is that the Federal Reserve and U.S. Government is doing “whatever it takes” to mitigate the adverse effects of the recession. 

Many economists and builders expect building and construction to lead the United States out of recession later in 2020.  Furthermore, the need and demand for housing remains acute. New Home Sales were a positive data point in May with sales up over 16 percent. 

A major concern is that COVID-19 cases were surging again throughout the country, especially the South. 


Unrelenting demand and insufficient supplies at mills and the distribution system drove prices higher by the end of June. SYP prices are now more than 50 percent higher, year over year.  Canadian Western and Eastern SPF prices gained more than $30/mbf just at one point. 

Premium grades in all species sold well above #2 prices. Studs prices increased following strong demand from home centers and do-it-yourselfers.  


While most lumber prices look expensive at these levels, the uncertainty about when and what will happen as the economy reopens will complicate purchasing decisions. 

If we get a “quick” or “V” shaped recovery in the labor and housing markets, the lumber supply chain could be stretched very thin throughout the rest of the summer.  

If we get a longer economic recovery, then mills will have the opportunity to balance supply and demand. As of now, if you need lumber you have to pay the piper. 

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