APRIL 2020
Southern Yellow Pine:
Southern yellow pine (SYP) lumber prices made a surprising comeback in mid-April. Forest2Market’s composite SYP lumber price for the week ending April 17 (week 16) was $358/MBF, a 5.9% increase from the previous week’s price of $338/MBF, but a 10.7% decrease from the same week in 2019.
It's difficult to tell where prices will settle as the market rebalances to account for the uncertainty and lumber manufacturers begin to align production with the dramatic shift in market conditions. However, we expect the related economic data to get worse in the near term before it gets better.
“April will likely be a lot worse -- it took until mid-March or even later for many states to tighten restrictions, and there’s a real possibility that many builders fast-tracked what they could in those early weeks before bowing to reality,” Zillow economist Matthew Speakman said in a statement. “With so much uncertainty across the economy, and the outlook not yet getting any clearer, it’s unlikely that builder activity will revert to anything close to ‘normal’ levels any time soon.”
While North American lumber prices will moderate in the coming weeks, the scheduled decreases in production will likely limit the downside price pressure that will be driven by slack demand as manufacturers draw down their inventories. We’re still very much in a “holding pattern” due to the prevailing sense of uncertainty surrounding global markets, politics and daily life.
Reproduced with permission from FOREST2MARKET