Southern Pine, which had been the laggard in recent weeks, took on a firmer tone. Meanwhile, Canadian and West Coast species languished amid moribund demand.

In Southern Pine, a growing number of mills extended order files into or even beyond scheduled holiday curtailments, and urgency to alleviate buildups eased as a result. Discounts moderated or dissipated altogether in many items that had previously declined for several weeks. Mills firmed quotes, especially in the middle widths, after clearing floor stock in early trading.

SYP was substituted more frequently for Spruce as buyers took advantage of the historically wide price spread between species that spanned triple digits in some items. Traders noted that the SYP’s unusually steep discount to Spruce surfaced weeks ago. However, the industry appears to take longer to react to such trends compared to past years.

Traders noted that companies are more careful to ensure the shift in species meets span ratings and other design specifications before jumping on the lower prices. Trading of Western S-P-F was thin as buyers lacked urgency and sensed further downside in the market.

Many cited the spread with Southern Pine as giving them pause. Producers lowered quotes and listened to counters but sold selectively. The spread in reported prices was immense.

A weakening lumber futures board further sapped energy from the physical market. The January contract dripped lower each day week to date. Total estimated volumes were relatively strong. In Coast markets, trading ground to a near-halt as a confluence of factors caused the market to stagnate.

Outlooks for 1Q 2025 were mostly positive, but the potential for tariffs, concerns about inflation, and interest rate uncertainty loomed large and tempered expectations.

Interested in keeping up to date with lumber price movements? You can subscribe to the Random Lengths weekly report, with the full commentary, including data visualizations and commodity-specific analysis.

The post Lumber price outlook positive despite historically wide price spreads appeared first on Fastmarkets.

The Random Lengths Framing Lumber Composite Price, which began the fourth quarter with eight consecutive weekly increases, fell for the second week in a row and lost $6. Wintry weather slowed consumption in northern-tier regions, contributing to the slower pace.

Western S-P-F sales slowed. Buyers digested recent purchases and many perceived an opportunity to pounce on at least modest bargains with supply tightness easing. In the South, downward price pressure persisted. Mills noted a measured increase in liquidity, but lamented suffering deepening financial losses at current price levels.

Colder temperatures slowed consumption, and year-end inventory taxes created incentive for buyers in some states to throttle back purchases. The unusually wide price spread between SYP and Western S-P-F was once again a frequent topic of conversation, but species substitution remained limited.

In Coast species, mills expressed confidence in next year’s outlook given the better-than-expected fourth-quarter run. Several mill representatives commented that they felt like they were “in the driver’s seat” as they wrapped up 2024.

In the Inland market, #2&Btr 2×6 posted modest gains across species, while wides were strongest in Fir&Larch. 2×12, which had posted some of the strongest gains for months, was flat in White Fir/ Hem-Fir. Sales of studs were lackluster.

Light industrial lumber trading kept downward pressure on some prices, as mills sold upper grades of shop and Mldg&Btr most aggressively.

Want more like this? You can subscribe to the Random Lengths weekly report, with the full commentary, including data visualizations and commodity-specific analysis.

The post Second consecutive week of price drops for framing lumber appeared first on Fastmarkets.

While the announcement garnered much attention, few traders considered the threat credible, and the industry as a whole took a wait-and-see approach to the news.

In Western S-P-F, upward price momentum paused as the US holiday approached. Buyers had an easier time covering immediate needs, and declined to extend inventories, especially in spots where winter weather had settled in. Lumber futures was little changed in early trading.

Buyers across the South lacked urgency amid abundant supplies of most items. Downward price pressure was unabated.

Many veteran traders noted that the price spread between Southern Pine and Western S-P-F was the widest they had seen in their careers and expressed surprise that species substitution was not more prevalent.

In Coast markets, upward price momentum and tight supplies kept prices trending higher in uneventful trading. Sales tapered as the US Thanksgiving holiday approached. Green Fir prices led the way, often due to mills drying more of their production.

Interested in learning more about the Random Lengths weekly report? Find out how to subscribe to gain access to the full piece, including data visualizations and commodity-specific analysis.

The post How will a Trump presidency impact lumber markets? appeared first on Fastmarkets.

The coming Thanksgiving holiday contributed to an ongoing cautious approach among buyers in the South. Many traders noted that Southern Pine’s unusual discount to other species prompted substitution, especially in the Upper Midwest. But species substitution wasn’t as prevalent as many traders anticipated given the price differences.

Prices of Western S-P-F continued to inch up in late trading, but most mills and buyers reported a slower pace as the week progressed. Many chalked it up to the approaching US holiday, price fatigue and a combination of limited needs and supplies. Several items have hit their highest price levels of the year.

Lumber futures charted a similar course, with modest gains on Monday and Tuesday giving way to selling through the rest of the week to date. The board traded near par with cash in most species.

The Coast lumber market continued its surge, with Hem-Fir #2&Btr dimension gaining $10-20 while Douglas Fir rose $10-35. Opinions on how much gas was left in the tank of the current run varied. By Thursday afternoon, several market participants reported that they were observing sales taper off.

In the Inland region, demand for all widths of 2&Btr dimension was solid, but 2×4 remained the least desired. While 2×12 often posted the strongest gains, 2×6 and 2×10 also showed strength. Gains were often a step behind the previous week.

The combination of limited availability and decent sales activity kept most board prices static. #2&Btr 1×10 across most western species and regions remained weak. Southern Pine #2 1×6 remained relatively strong.

Want to know more about the Random Lengths weekly report? Find out how to subscribe to gain access to the full piece, including data visualizations and commodity-specific analysis.

The post Lumber price gaps continue to expand ahead of Thanksgiving appeared first on Fastmarkets.

The sales pace moderated compared to recent weeks. Some traders attributed the quieter tone to the industry’s migration to the NAWLA Traders Market in Phoenix, but others noted the annual conference’s impact was negligible. Buyers in many regions who had waited while questioning the current run’s staying power, given the time of year, stepped in to secure coverage when they could.

The Random Lengths Framing Lumber Composite Price gained for the seventh straight week, climbing $6 to $447. That is its highest level in more than 15 months.

Western S-P-F mills continued to command double-digit premiums for most #2&Btr dimension items. Sales slowed, due at least in part to dwindling mill offerings. Order files among many producers reached early December. The futures market drew little attention from cash traders.

Deepening discounts and mounting accumulations at many mills across the South once again ran counter to the otherwise strengthening overall trend.

Buyers moved to the sidelines or replenished sparingly, citing a traditional seasonal fade in demand and abundant supplies. Mills focused on clearing their most pressing buildups. Southern Pine sold readily as a substitute for Spruce in some northern-tier markets because of the widening price spread between the species.

In the Coast region, #2&Btr dimension prices in both Douglas Fir and Hem-Fir all increased by double digits as buyers remained active.

Green Fir sales remained stout, leading to higher prices across many items, especially in the narrow widths. 2×6 and 2×12 shared the spotlight as the hottest widths in the Inland region. 2×4 picked up the pace, but remained a step behind. MSR 2×6 was among the most difficult items to source. Shop lumber prices held steady amid a slower pace.

Interested in learning more about the Random Lengths weekly report? Find out how to subscribe to gain access to the full piece, including data visualizations and commodity-specific analysis.

The post Navigating the lumber market as prices hit a 15-month high appeared first on Fastmarkets.

The US presidential election injected a dose of optimism among some traders. They also weighed the Federal Reserve’s decision to cut the benchmark interest rate 25 basis points, while Freddie Mac noted mortgage rates were still rising.

The Random Lengths Framing Lumber Composite Price gained for the sixth straight week, climbing $11 to $441. That is its highest level since August 2023.

A fading Southern Pine market was once again an exception to an otherwise upward trend in most framing lumber species. While supply-driven strength persisted in Canada and the western US, downward price momentum mounted in the South.

A growing number of truss plants in the Upper Midwest and Northeast substituted Southern Pine for Spruce to take advantage of the widening price spread between species. Many traders noted that this week’s presidential election results provide more clarity going forward. Most sales were limited to mill offerings that could ship within one week.

Western S-P-F prices continued to climb by double-digit increments in most cases. Buyers with immediate needs padded thin inventories with available supplies.

Tightness in many items led mills to successfully raise quotes and extend modest order files out to the end of the month. Lumber futures seesawed through the week but continued to carry a modest premium to the cash market.

Traders noted that current futures levels were profitable for producers and speculated additional mill participation could become a factor. In the Coast region, sales activity soared following Tuesday’s election results with most mills reporting that the phones were ringing off the hook.

Many traders anticipated an economic boost to follow the return of the Trump administration to Washington, and sought to secure loads at current prices.

You can access the full Random Lengths Lumber Market Report here, which includes specific analysis on different lumber grades. Subscribe for prices for more than 1,600 items of softwood lumber, panels, and other wood products.

The post Framing lumber prices continue to surge amid election optimism and interest rate cuts appeared first on Fastmarkets.

The Random Lengths Framing Lumber Composite Price notched its fifth consecutive weekly gain and hit $430, its high so far this year.

A mild increase in demand for Western S-P-F collided with the realization from buyers that lumber supplies were significantly constrained in spots. Mills sold their few prompt offerings and raised quotes for extended shipments. Most order files extended into mid-November. Rising mortgage rates and next week’s U.S. election were distractions but had little impact on the market.

Gains in the cash market were supported by strong upward movement in lumber futures through Wednesday. The November and January contracts traded in the green much of the week, with double-digit gains posted across all contracts on Wednesday.

Despite an overall rising market, Southern Pine was a laggard. Supply-driven strength that fueled the recent run in the South faded or stalled as mill order files dwindled and prompt loads surfaced more frequently. Demand weakened as a growing number of buyers throughout the distribution pipeline moved to the sidelines.

Some mills continued to capture premiums, noting that middle widths in particular were competitively priced compared to Western S-P-F. Buyers confined new orders to loads that could ship within one week.

The Coast market rolled into Halloween on a positive note as tightness in green Fir and S-P-F resulted in buyers subbing in dry Fir. “We’re driving the bus right now,” said one mill salesman.

Interested in learning more about the Random Lengths weekly report? Find out how to subscribe to gain access to the full piece, including data visualizations and commodity-specific analysis.

The post Lumber prices continue to rise: Fifth weekly gain despite southern pine lag appeared first on Fastmarkets.

Amid localized challenges, broader market dynamics further complicate the outlook for western softwood pallet producers. The sector faces significant supply chain constraints, driven by high import volumes and logistical bottlenecks.

As the industry braces for seasonal strains and anticipates shifting market conditions, the response to these pressures will be crucial in shaping the future of softwood pallet production in the region.

This pallet pricing newsletter includes:

• Insights into changing regional prices compared to September’s assessments
• The impact of the 2024 holiday season, which is set to be the busiest since 2021
• Expert analysis on changes in pallet production and wages
• How macroeconomic headwinds are impacting the market

Interested in early access to our prices and analysis? Sign up to the pallet prices newsletter to be the first to receive them.

Pallet trading prices

Western softwood US pallet manufacturers continued to face steep competition from alternative species and an oversupplied used pallet market. 

Fastmarkets newly assessed Pallets, western softwood, GMA A-grade delivered Seattle at $11.00-17.00 per pallet on October 30. This was unchanged from recent weeks. However, the other major market in the western softwood producing region, San Francisco, was another story. 

Fastmarkets assessed Pallets, western softwood, GMA A-grade delivered San Francisco at $10.50-16.50 per pallet on October 30. This assessment reflects a -$0.75 decline to the low and high of the previous range.

While local low-grade lumber prices have remained fairly stable for the last month, competition from alternative species and a competitive used market resulted in some manufacturers lowering prices. Good quality used B-grade pallets and excellent quality block pallets were offered from $8-10 in the downtown San Francisco area.

Although most producers did not report changes in their assessments of the market, comparable erosion in asking prices were observed in Chicago, Los Angeles, and Dallas-Fort Worth, with comparable B-grade and off-spec pallets available at competitive prices below recent western softwood basic unmodified GMA Grade-A 48×40 pallet rates.

At present there is ample availability of new western softwood pallets on the market for prompt delivery. Low-grade western softwood producers reported that while agricultural and manufacturing purchases have picked up slightly in the last month – they have encountered resistance from pallet producers who are hemmed in by current market conditions.

Further complicating matters, tightness in the green Fir market has pushed more western softwood pallet producers to the dry market. This corresponds with reports from dry low-grade manufacturers who recently noted a slight uptick in sales volumes to the pallet sector.

As Fastmarkets ramps up its coverage of the pallet market, we invite feedback on specific pallet-related items for future reports. Contact ian.templeton@fastmarkets.com with comments or to contribute future pricing information.

New cost model for GMA A-Grade stringer pallet

We’re delighted to announce our new cost model detailing the gross variable cost for new western softwood GMA A-grade stringer pallet across six key metro hubs, with a side-by-side comparison of what it would cost depending on whether you use #3 or #4 grade lumber to produce the pallet.

The model is based upon the availability of softwood lumber and will factor into consideration the delivery cost from the mill to the pallet facility, which is partly why we see a lower cost in Seattle and a slightly higher cost in Chicago.

We must caveat that while certain manufacturers will have lower costs due to a higher utilization of automation, these are our estimated averages for each of the metro hubs.

Moreover, the total cost for each one is reached by adding the lumber cost and labor cost, which are labeled for each metro hub, alongside a nail cost which is uniform across the country, and miscellaneous costs which include smaller items such as gas, electricity, paint, and staples.

Holiday season supply chain strain

The holiday season is shaping up to be the busiest since 2021, driven by record spending forecasts and a projected 3% increase in holiday sales from the year prior, according to the National Retail Federation. Despite a temporarily settled labor dispute on the East and Gulf Coasts, supply chain challenges persist, with high import volumes redirected to the West Coast ports like Los Angeles and Long Beach.

These diversions, coupled with delays in freight rail, have led to increased dwell times—up to nine days in some cases. As containers wait for rail capacity, companies may incur higher logistics costs, often turning to trucking to bypass bottlenecks, driving up overall transportation expenses. For the pallet market, this could translate to increased prices as businesses prioritize pallets for stockpiled goods and anticipate future disruptions. 

The situation is further complicated by a reduction in trucking capacity, as company exits have outpaced new additions since October 2022, according to data from the Federal Motor Carrier Safety Administration. With this loss of trucking firms, bottlenecks are expected to worsen as freight struggles to move efficiently.

Industry players, including DHL, are advising clients to reroute rail-bound freight back to the East Coast. Moreover, as the International Longshoremen’s Association continues to hold firm on automation issues, and with a critical January 15 deadline looming, there’s potential for renewed strike actions that could exacerbate these logistical challenges into the new year.  

The resulting constraints may create a shortfall of pallets on the West Coast, as increased demand and limited capacity put pressure on suppliers and lead to higher pallet prices. Pallets from US international trade arriving through container have increased steadily since March 2024 as seen below, in part due to provisions made by logistics managers to get goods in before the October strike deadline.  

Pallet industrial production index decline 

FRED data shows that the pallet industrial production index has fallen 5.9% from July 2024 to September 2024, in line with the volatility we’ve seen in this index since the start of 2024, although still relatively high for the figures seen in the last 18 months. 

This is reflective of conflicting forces in the pallet market of large manufacturers with a strong network of facilities having steady production, but smaller manufacturers that have struggled in the face of smaller margins due to low prices and higher costs exiting the market. 

Pallet wages remain stable in 2024

With respect to wages in the pallet industry, their growth outpaced the growth of wages in the manufacturing sector at large from the pandemic up until 2023, though since then there has been relatively little increase in pallet wages which has allowed manufacturing wage growth to catch up. Pallet wages grew by 30% from March 2020 to September 2023 whilst overall manufacturing earnings grew by 18% over the same period, but since then wage growth has been 0.3% and 5.1% respectively. 

This is significant, as it offers some relief to pallet producers who endured sharply reduced margins following the decline from record-high pallet prices seen during the pandemic, which we in part mentioned above. Though wages have largely levelled since 2023, there has been a steadily upward trend in wages since March 2024 so wages figures in subsequent months will be keenly watched. 

As Fastmarkets expands its coverage of the pallet market, we invite feedback on our analysis and insights. Contact antonio.gallotta@fastmarkets.com with comments.

Hurricane impact on lumber and pallet markets

Hurricane disruptions across the US South have heightened market tension, with both temporary curtailments and some permanent or indefinite mill closures affecting lumber supplies.

With inflation easing, interest rates have finally stabilized and are expected to trend downward through year-end as the Federal Reserve adopts a more balanced approach to its dual mandate of price stability and full employment.

This shift could serve as a catalyst for growth in single-family housing construction, reversing recent momentum losses, and easing financing constraints in multifamily development. Assuming inflation and interest rates remain favorable, the foundation for a demand recovery in lumber appears strong. 

This is a notable tailwind that will feed downstream into the pallet industry because, as noted in the first edition of the newsletter, framing lumber has long been a leading indicator for low-grade lumber which is primarily used in pallet manufacturing. 

Pallet producer price index sees encouraging signs

The Pallet Producer Price Index data indicates that while prices continue to decline from their 2022 highs, the rate of deceleration has eased in recent months—an encouraging sign for the industry. The percentage change is steadily approaching positive territory, signaling potential stabilization. 

This trend aligns with the rebounding housing market, which is expected to have positive ripple effects across the lumber industry. As reflected in the forecast above, we anticipate a steady increase in prices heading into 2025, supported by renewed demand from housing and construction sectors. 

September housing starts remaining steady

Housing starts remained relatively steady in September, with minimal change from the previous month. According to the Census Bureau, housing starts reached 1.354 million units (seasonally adjusted annual rate), a slight 0.5% decrease from August. Notable revisions were made to prior months, with July and August figures collectively revised up by 30,000 units from the August report. Regionally, the Northeast saw the largest growth, with starts increasing by 58% over the previous month.

Overall in the US permits dropped by 2.9% from August, indicating a likely slowdown in October, especially with the disruptions caused by Hurricanes Helene and Milton.

Want to learn more about the pallet market and the factors influencing it? Sign up to the newsletter to be the first to see our prices and access our insights and analysis. We provide a range of market intelligence, including short-term forecasts, price data and market coverage to keep you one step ahead of the market. Speak to our team and find out more today.

The post New western softwood pallets struggle against alternative species and used market appeared first on Fastmarkets.

The front month in lumber futures continued to trade at a slight premium to the physical market, but the January contract opened a sizable spread with cash. The roll to January was a prime feature for the week, with volume and open interest in that contract nearing par with November.

Mills in the South continued to push for double-digit price hikes with moderate success. Most Southern Pine prices continued to climb. However, buyer resistance to the highest mill quotes grew more intense as the week progressed. Some buyers throttled back new orders to the most pressing necessities while digesting recent purchases and trying to gauge how much longer the current market run will sustain itself.

Coast dimension sales continued to outpace production, keeping upward pressure on some prices.

Board markets remained on a divergent trend. Producers continued to adjust prices predominantly downward to keep volumes selling into markets still conservative in their approach to buying. Discounts ranged from $5 to triple digits, depending on the need to sell production.

Interested in accessing the full report? You can speak to a member of our team to discuss subscribing to the full Random Lengths Weekly Report, which contains expert insights and analysis on prices movements in the market.

The post Framing lumber prices surge: supply strains push market to near annual highs appeared first on Fastmarkets.

The Random Lengths Framing Lumber Composite Price notched its third consecutive weekly increase, rising $8 to $411. That is the composite’s highest level since April.

Western S-P-F buyers padded light field inventories and procured occasional insurance loads amid a perception that supplies were less available. A few mills raised quotes after nearly every sale, and the highest levels were unproven. However, some of the strongest one-week gains of the year were registered in the narrow widths of #2&Btr.

The November futures contract traded mildly below last Friday’s settlement amid heavy volume on Thursday. Despite gains in cash, the board continued to carry a premium to most species.

In the South, upward price momentum eased as the week progressed. Sales moderated to a steady, but less fervent pace compared to recent weeks. Hurricane Milton’s aftermath generated a modest increase in demand for items needed to rebuild fences and make other repairs in the storm’s peripheral path.

Areas hit directly by the hurricane and the resulting catastrophic flooding remained in recovery mode, and traders noted that any impact on lumber demand was likely still months away. Uncertainty surrounding the coming presidential election gave buyers another reason to remain conservative. Trends in board markets mostly persisted.

Discounts outpaced price gains by a wide margin. Surpluses at mills and the desire to keep volumes turning generated lower prices. 1×10 excesses across several markets remained problematic.

Interested in learning more about the Random Lengths weekly report? Find out how to subscribe to gain access to the full piece, including data visualizations and commodity-specific analysis.

The post Framing lumber prices continue to climb as supplies tighten appeared first on Fastmarkets.