A much stronger spruce market pushed the Ro-Mac Lumber & Supply, Inc. Wood Commodity Index (Index) higher in June, as dimensional lumber significantly outpaced sheathing products. The full retreat of lumber since the beginning of the year abated, as pent-up demand from many of the country’s northern regions seemed to take hold. The question bodes for many in the industry, “Is this a trend or just a blip?”
The lumber portion of the Index increased 10.4% (or $31.50 per thousand) with most products going higher, except for narrow width pines. Stud prices increased plus $30 per thousand with 2x6-92 5/8 increasing the least. 2x4 dimensional spruce lumber increased 7.7%-23.4%, depending on specific lengths, with similar increases in 2x6 spruce. Wide width 2x12 yellow pine added 4.6%-11.1%, and the price increases narrowed in conjunction with the widths.
The sheathing portion of the Index was mixed, as prices increased on average 1.5% (or $4 per thousand). CDX pine plywood was mixed, as 1/2 CDX gave back 1.8% with 5/8 CDX staying flat, and the thicker 3/4 T&G panel added 2.4%. OSB sheathing added $6-$9 per thousand (or about 4%) on average, as increased demand gave those producers hope for better times. The non-carryover of lumber prices to the sheathing market suggests that the price increases may be more of a blip than ushering in a trend.
Builders, the commodity markets and the American economy all need one thing—consistent growth. The continuous, nauseating monthly ups-and-downs of economic numbers have most people spooked to take any long-term action. There is little confidence the most recent market activity will sustain itself. Plus, forecasts for hurricane season are projected to be less than average. Without increased housing activity, or bad weather issues, expect the gains in commodity prices to evaporate by summer’s end.
Don Magruder is the Chief Executive Officer of Ro-Mac Lumber & Supply, Inc. in Central Florida (www.romaclumber.com), and he is a former President of the Southeast Mississippi Home Builders Association, and past Associate Vice President of the Home Builders Association of Lake County. To contact Magruder, email him at