By Ryan Dezember
18 hours ago
Sawmills Are Cutting Back to Buoy Lumber Prices
By Ryan Dezember
A pattern is emerging in lumber markets:
First, a big sawmill owner announces production curtailments.
The next day, lumber futures quickly rise by the most allowed by exchange rules.
It played out today after West Fraser Timber said late Tuesday that it will curb production at its Perry mill in northern Florida later this month due to languishing prices for two-by-fours amid the slowdown in homebuilding and remodeling.
This morning, within about 90 minutes from the open, lumber futures shot up by $24 per thousand board feet. That’s the maximum allowed by exchange rules meant to maintain orderly markets.
The same thing happened Dec. 6, when West Fraser rival Canfor said it was cutting back output in British Columbia.
The difference this time is that future prices have eased back down, illustrating the challenge even the increasingly consolidated sawmill sector will have buoying wood markets amid sharply declining demand from builders and do-it-yourselfers.
