The Ro-Mac Lumber & Supply, Inc. Wood Commodity Index (Index) moved lower as tropical rains and a subdued housing market fell prey to the dog days of summer. Only one item in the Index increased in price (15/32 CDX +$3 per thousand), with all others succumbing to the market’s downward trend. Unless there is a spike in housing sales or a late season hurricane, there will be little to move this market upward.
The dimensional lumber portion of the Index dropped 4.3 percent to $347.75 as wide-width pine led the retreat, with drops from 6.7-9.6 percent. Dimensional spruce dropped on average $15 per thousand, with declines in stud pricing staying below $10. Narrow-width 2x4 pine was down 4.2 percent as mills looked for buyers. Typically, with all of the rain in many areas of the south, pine pricing would be somewhat firmer due to logging constraints. We have not seen that yet.
The sheathing portion of the Index dropped 1.4 percent or on average about $4 per thousand. The declines in OSB sheathing were a little more pronounced retreating on average about $6 per thousand. Thicker CDX T&G pine plywood posted a decline of almost $40 per thousand, which is fairly significant. Pricing indicates that the supply side is more in charge than demand.
Commodity prices increase on demand and the enthusiasm in the market — currently, both are waning. Expect to see other building supply areas increase in price as true labor and operational costs increase; however, commodities may be in for a late year struggle. The next few weeks should clearly show us how things will end up.
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