Canada faces weaker demand for lumber

Over the previous nine weeks, Canada has shown lower demand for lumber, as the do-it-yourself boom is coming to end and consumers change their budget goals.

“The deal is that people are spending less time in their homes now,” – says Dustin Jalbert, senior economist at Fastmarkets, which publishes the letter from Random Lengths. “You no longer have to see the old porch or fence, which needs to be repaired, so often”.

According to Random Lengths, last week, the cash price for 1,000 board feet for two-by-fours made from Western spruce, pine and fir (SPF) reached US$490, marking a US$5 weekly gain.

Even with the small prices gain, following eight weeks of decreases in a row, the cash prices were down by 70% from the peak of US$1,630 for 1,000 board feet reported in the middle of May.

Mr. Jalbert says there is strong demand among consumers wishing to return to normal as they redirect their budgets to travelling, going out and visiting sporting events. It means home repairs are postponed.

In mid-May, we’ve seen a significant imbalance between supply and demand, but now the lumber market seems to be stabilizing (provided no unexpected changes arise). Experts believe lumber prices will be more stable in August after falling down from record high levels.

Canada’s lumber markets have been going up and down since the beginning of 2020.