Paul Jannke

Speaking on North American lumber markets, Paul Jannke, FEA Principal, says he expects prices to peak in June/July and then move sideways for the balance of the year (in the $325 to $375 per MBF range). Western SPF should average a little over $360 while SYP and D-fir are in the $400 range. According to Jannke, these uninspiring prices reflect the fact that current prices are well above costs (particularly in the US) and some producers are expected to ramp up production while some dealers cut back on their purchases. Further, notwithstanding his expectation of increasing housing starts and strong R&R activity, overall consumption is still expected to be weak. Not so weak, however, as to bring back the March/April lows.

Beyond 2020, lumber prices are expected to move up into the $350 to $400 per MBF range. This reflects an 8% increase in demand from the residential sector or about 2 billion bf in 2021, and minimal additions of new milling capacity. Jannke noted that although Canada has borne the brunt of the recent curtailments (down 15% or 3.5 BBF compared to 6% or 2 BBF in the US), this reflects in part, high SYP usage in the R&R market. As residential housing strengthens in 2021 and softwood lumber duties are reduced (expected in October), Jannke expects Canadian mills to fare better. For more information from FEA’s Russ Taylor, click here.