Over the last 30 days, the Ro-Mac Lumber & Supply, Inc. Wood Commodity Index (Index) drifted downward as pricing may have bumped its high point. The Index dropped in total 1.5 percent or $6.32 per thousand. The initial countervailing duties on Canadian lumber seem to have been baked into the pricing. Even with the threat of new tariffs at the end of June, the market is just not motivated to go higher. As the cost of housing increases and interest rates edge up, the housing market could be losing buyers.
The dimensional lumber portion of the Wood Commodity Index dropped 3.0 percent to $437.23 per thousand as spruce retreated from the shock of the duties. Spruce stud pricing remained firmer with 2x4-92 5/8 studs adding $2-$5 per thousand. Specialty studs were somewhat mixed on species requirements. 2x4 dimensional spruce declined in longer lengths on average $25 per thousand. Shorter lengths were down $12.
The sheathing side of the Index was nearly flat only dropping 0.2 percent or about $1 per thousand. CDX pine pricing drifted down $5-$10 per thousand while OSB sheathing added only $2. Overall, the market seems to be trying to hold onto gains. The test will be if OSB mills can hold onto pricing throughout the summer. Thus far this year, the mills have been successful in balancing the demand and pricing equation in their favor.
Last month, I described the wood commodity markets as being on a roller coaster. Way up and then way down. There was a slight decline this month, and the challenge is to see if this is just a bump before another wild ride. My bet right now is that the markets need a month or so to digest the last five months to see if the demand portion of the equation will support another run. Builders should be careful in long-term pricing but not afraid to bid projects.
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