By: The Working Forest Staff
A severe lack of supply along with unrelenting demand sent softwood lumber prices up once again for the week ending April 30, according to Madison’s Lumber Reporter.
At the producer level, sawmill order files stretched out 4 weeks or longer, with chronically delayed deliveries adding approximately 3 weeks to that. As the home building season is just getting started for the year, extremely busy construction activity forced customers to buy whatever wood they could, at whatever price was quoted. As previously mentioned by Madison’s, the higher costs are being passed on to the end-user; the home buyer, who is paying those increases with no concern. Word has started to come in that DIY and remodeling customers are starting to balk at high prices on the shelves at retailers, however, these are not the main volume consumers of North American softwood lumber thus do not have the power to put pressure on prices.
The latest Case-Shiller index shows US house prices up +12% compared to one year ago. As home buying, and thus housing construction continues unabated there is no reason for lumber prices to go down.
Prices of Western S-P-F in the US advanced significantly again, and producers extended their sawmill order files into the last week of May or beyond. Veteran traders noted that the trend of scant supply persisted, as any carload that came available was snapped up immediately by the quickest buyer. Customers who missed out on those deals desperately searched through the secondary supply scene for anything available that might ship quicker, finding virtually no success as wholesalers and distributors had little inventory themselves.
Western S-P-F producers in BC reported more of the same insanity the week of April 30th. There was no sign of weakness to speak of as sawmills pushed their order files into the first week of June. Suppliers were generally sold out of any cash wood before midweek, with only the smallest smatterings hitting the US cash market before vanishing immediately
Continued price increases were met with disbelief, however, inventories throughout the supply chain as so low that customers could do nothing but pay. In the week ending April 30, 2021 the wholesaler price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr was US$1,420 mfbm. This is up by +$90, or +6%, from the previous week when it was $1,330.
That week’s price is up by +$190, or +15%, from one month ago when it was $1,230.
Compared to the price one year ago, when it was US$321 mfbm, for the week ending April 23, 2021, the price of Western S-P-F KD 2×4 was up by +$1,099, or +342%.
EPAL pallets grew by 1.14% in 2020
The European Pallet Association e.V. (EPAL) has recorded an increase in the production of EPAL pallets in 2020, after several years of growth. Despite the challenges of the Covid-19 pandemic and the hike in wood prices, production of EPAL pallets grew by 1.14% to 97.3 million pallets in 2020 (2019: 96.2 million pallets).
Reported figures for repairs of EPAL pallets slightly decreased. Overall there was an increase in production and repairs of EPAL pallets of 0.5% to 123.5 million pallets (2019: 123 pallets).
“This positive development is particularly remarkable in view of the economic slump resulting from the Covid-19 pandemic”, remarks Robert Holliger, President of EPAL. “The adverse effects on national and international supply chains was an unprecedented challenge for producers and users of EPAL Euro pallets, which we successfully tackled together.”
The production and repair of EPAL pallets is classed as “essential” by many European countries because pallet logistics and, in particular, the open EPAL Euro pallet exchange pool is vitally important for goods transport. To maintain the supply of foods and other consumer goods to consumers, and to ensure the retail and industry supply chains, EPAL licensees were always, and still are, able to make deliveries at all times during the lockdowns.
The European Pallet Association e.V. (EPAL) ensures a smooth flow of goods in the logistics world with over 600 million EPAL Euro pallets and 20 million Box pallets in the world’s biggest open exchange pool.