Find out if lumber prices have any chance of normalizing this year
Lumber futures have hit $628 per thousand board feet (mbf), the Wall Street Journal has reported. Prices are now up nearly 40% since late August and are almost as high as their pre-pandemic levels.
In addition, the average price of Western SPF softwood lumber rose to $480 for the week of September 17, a 7% uptick from the previous month when it was $447, according to pricing service Madison’s Lumber Prices.
While analysts and industry executives don’t expect prices to spike and then crash as they did in spring, they believe prices need to increase further to balance supply and demand.
“We think this $100 run that we’ve seen so far, that we’re not done yet,” Paul Jannke, a lumber analyst for Forest Economic Advisors, said in a statement. “We do think over the next few years, on average, that prices are going to come off, but they are going to remain high relative to history.”
Since peaking at $1,711.20 on May 10, lumber prices are down a staggering 74%. The bursting lumber bubble wiped out all of its 2021 gains and has prompted fears of runaway inflation. However, Federal Reserve chairman Jerome Powell said that the late-season uptick in lumber prices was the result of supply chain bottlenecks.
“Over the next few months, there will still be a lot of supply chain issues, and dealers don’t want to get caught with low supplies,” Russ Taylor, a Vancouver wood market consultant, told the WSJ. “We’re going to see very volatile prices.”