The lumber industry is dealing with the same factors other production industries are having. They are having a problem hiring people to work.
In addition there was a cataclysmic weather event in British Columbia on November 15th. Multiple sawmills and the towns they resided in were flooded. The CN railroad and multiple highways in BC were blocked. This caused some additional pulp mills to shut down because they could not move their products to Vancouver. In addition the closing of the CN line caused rail traffic moving down the coastal US (WA, OR, NV, AZ to all be delayed or rerouted.
The largest sawmill in Canada(West Fraser) stopped selling lumber by rail car for 3 weeks. They initially started selling only by truck to the US. They suspended this after about a week. There are only so many trucks available in BC.
I personally have a truck sold to Boise that was ordered on 10/19 for w/o 11/1 shipment. It finally shipped yesterday. Over a month behind schedule.
Meanwhile all of our customers that use lumber are extremely busy. There has been virtually no winter weather in the US limiting demand. Housing demand(1.6 million starts) is continuing to be very good as people continue to exit the cities and move to the suburbs and more rural areas.
In addition other major lumber consuming industries such as wooden pallets are setting records. Pallet prices are at all time highs.
Home center business is also very good. Typically it reduces after October. This has not been the case so far. People continue to invest in home owner projects. They feel confident investing money into their house. More so, than the stock markets. Also, many people are choosing to remodel their existing home instead of buying a more expensive home in the same area.
Lastly, other areas of the world such as OIL producing countries are increasing their demand for construction materials. Plus the European countries are starting to increase demand for building materials. Great Britain is finally getting over Brexit and getting back to business.
I would not look for a major correction in lumber pricing until late spring. Many companies got caught with low inventories going into the last quarter. Prices corrected down to their most recent lows in August. We went up until November 15th. Now, we are trying to build inventories for the first quarter. The mills are firmly in control now. The customers are screwed. We may very well go right back up to $1700. DO NOT BE SHORT.
All these point to overall good demand for lumber, plywood & osb.
It is a possibility, but I heard the same thing during the last spike.
Of course, if there is hyperinflation it may be three times your target.
Thank you for an “insider’s look”. I’m a serious DIY’er...and very thankful that I’m done with this house except for some minor trim work in the garage. I choke looking at the prices for trim...even MDF. For years, I’ve hung onto a 4x8 sheet of half-inch B grade plywood. Never needed it, but didn’t have the heart to get rid of it. Now I know why I’ve kept it!
Great info. Thanks!