September 2015 Lumber & Commodity Report

webSized lumber cut 02

 

The beat down of the wood commodity market continued in September as the Ro-Mac Lumber & Supply, Inc. Wood Commodity Index (Index) for Central Florida dropped $7.53 per thousand (or 2.7%).  Dimensional lumber continues to struggle to find a bottom while plywood and sheathing items have tried to bounce back from last month’s heavier discounts.  Overseas demand has diminished, and an uncertain U.S. housing market are keeping many on the sidelines.  Many have concerns that interest rates and a sagging stock market could take a toll on the housing forecast over the next few months. 

The dimensional lumber portion of the Index declined 9.5% to $287.93 per thousand as everything went down.  Not one item held, and most drops were in the $20-$30 per thousand price range.  Wide width pines were hit very hard with most giving back $60 plus. A recent mill closure by Canfor may just be the first if pricing and demand don’t soon improve.

Plywood and sheathing pricing went up 3.7% (or about 30 cents per sheet) as manufacturers took better control of the supply-and-demand equation.  Some of this clawback may be from an overzealous retreat in pricing from the prior month.  It appears the impetus for continued price increases are failing.  The best hope for manufacturers is that prices will stabilize and not follow the lead of dimensional lumber.

Make hay while the sun shines applies to the here and now.  Winter is just a few months away.  Unless demand cranks up for the fall season, this winter could be brutal for builders and suppliers if there is a repeat of last year’s harsh weather.  At some point, builders need the demand equation to power the market forward, and I don’t see that at this point. 

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 This email address is being protected from spambots. You need JavaScript enabled to view it. .

Ro-Mac Newsletter Signup