Framing lumber prices surge: supply strains push market to near annual highs

Persistent upward movement in framing lumber prices left many items approaching their highs for the year in the fourth quarter. The current supply-driven run has pushed the Random Lengths Framing Lumber Composite Price to its fourth consecutive weekly increase.

The front month in lumber futures continued to trade at a slight premium to the physical market, but the January contract opened a sizable spread with cash. The roll to January was a prime feature for the week, with volume and open interest in that contract nearing par with November.

Mills in the South continued to push for double-digit price hikes with moderate success. Most Southern Pine prices continued to climb. However, buyer resistance to the highest mill quotes grew more intense as the week progressed. Some buyers throttled back new orders to the most pressing necessities while digesting recent purchases and trying to gauge how much longer the current market run will sustain itself.

Coast dimension sales continued to outpace production, keeping upward pressure on some prices.

Board markets remained on a divergent trend. Producers continued to adjust prices predominantly downward to keep volumes selling into markets still conservative in their approach to buying. Discounts ranged from $5 to triple digits, depending on the need to sell production.

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