Lumber Price Rally Expected to Lose Steam in Q2 This Year

SEATTLE (Scrap Monster): Lumber prices have seen a huge rally this year, rising by more than 20% from the multi-year lows recorded late last year. However, this rally is likely to flatten off in the second quarter of 2023, said John Cooney, Equity Research Analyst at ERA Forest Products Research.

The supply cutbacks by lumber majors such as Canfor are cited as the main driver of rising lumber prices. Several companies had announced production curtailments towards the end of 2022, while some others have announced plans of more curtailments in the months to come. Incidentally, B.C. lumber production has been badly hit due to sawmill closures or temporary curtailments.

The pine beetle infestation has resulted in fibre shortage, especially in the B.C. This in turn has accelerated sawmill closures in the region, John Cooney noted. The demand remains fairly pale, he added.