Lumber prices peak but relief remains elusive

It’s expected to be a few more months before stability returns.
After reaching all-time highs in May, lumber prices have been falling fast.
Updated: Jun. 17, 2021 at 9:53 PM CDT
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WICHITA, Kan. (KWCH) - The heat in the lumber market is starting to cool off as prices have fallen fast in the last month.

Random Lengths Lumber has gone from a peak of about $1,700 per thousand board feet in May to about $900 Thursday.

It’s after 15 months of prices on an accelerated climb.

“Finally seen the lumber market hit its peak,” said Jay Robinson, Mill Creek Lumber Kansas Market Manager. “For the last three weeks, the Random Lengths reporting that drives the lumber market has printed down. It’s a trend finally.”

However, this doesn’t mean the situation is settling out, as this all comes with a fairly big cavitate because while the peak has been reached on lumber, the relief won’t be felt on construction sites for builders and new homebuyers anytime soon.

Robinson said, “There are still some huge supply chain issues.”

Robinson said one of the biggest issues is getting inventory in.

“The lumber that we’re buying today at a discounted price we will not see until August because everything is still shipping late. Everything is still three to four weeks late,” said Robinson. “Typical railcar lumber gets to us in three to four weeks. It’s taking six to eight weeks, so we should see some relief in August.”

It isn’t just Mill Creek, Robinson said, but the places they go if they need to stock up quickly.

He said, “Wholesalers, distribution, they are basically out. Have no products for sale. They are in the same situation we’re in, having to buy from the mills.”

In July, Robinson said some reprieve should be coming in July, with two new mills will be coming online.

“OSB market is still a firm, strong, tight market. Undersupplied. There’s a little bit of light at the end of the tunnel,” said Robinson.

He added, “A lot of job sites nationally are being stopped because of a lack of product, and as that supply chain improves, that wood is being consumed as soon as it hits the ground.”

Getting that supply in will also mean resolving some issues with transportation.

Robinson said, “Shortage of rail cars. Trucking issue is a nightmare. There is currently one trucker for every 90 loads to be hauled.”

Robinson said the demand from big box stores has also decreased, helping reach other parts of the lumber market. That is driven by sticker shock lowering demand from people looking at DIY and home improvement projects.

Mill Creek Lumber is seeing builders reaching out weekly for updates on supply, price and timeline.

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