Columnists, Darren Satsky, V5I6

Staying Ahead of the Market

A robust lumber market this fall season combined with lower production from Western sawmills elevated price levels and extended ship times. Buyers’ persistent low inventories coincided with strong demand for many lumber products. 

The low inventory scenario continues to have the potential for adding volatility to the lumber market this winter.

 In our previous lumber market report, we wrote “that any sudden news of more production curtailments, a pickup in housing construction, or a surge in builder confidence could impact the market at any time.” Well, we definitely had all three factors at work. Builder confidence clearly had a big impact and is discussed in the next section.   


Builder confidence for newly built single-family homes rose three points to 71 in October according to the latest National Assoc. of Homebuilders/Wells Fargo Market Index. This index gauges builders’ perceptions of current single-family home sales and also asks builders to rate traffic of prospective buyers. 

Any number over 50 indicates more than half of builders rate conditions favorably.  

Looking forward, keep your eye on the Federal Reserve Board policy decisions, interest rates, and a possible compromise to the U.S.-China trade dispute to keep the economy and the construction markets on track. 


Lumber markets were mostly higher with Canadian SPF dimension leading the way. Western SPF 2 by 4 dimension #2 & better prices were higher over the period by about $39/mbf or 11 percent. Eastern 2 by 4 spruce moved up 6 percent.  

SPF stud prices and SYP dimension prices reported marginal gains. The price of SPF 2 by 4 8-foot stud grade was up about $12/mbf or 4 percent. Western 2 by 4 #2 SYP prices increased modestly in the period, up about 2 percent. Treated SYP moved in line with the change in bright stock prices. 


By one historical measure, the Canadian SPF 2 by 4 market looks a little expensive. If we look historically at the previous five-year average, today’s SPF lumber prices are above the previous five-year average and well ahead of prices last year at this time. The stud market has not kept pace with dimension lumber and is still below historic averages. 

Recently our customers have stated “as long as good weather holds, construction likely will continue on its recent pace.” The best scenario for price gains is for the consumer to stay on track and for winter weather to hold off.  

Ultimately, continued reduction in available timber plays a big role in driving market prices, and setting the table for a possible bull market this winter.

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