Southern Pine lumber prices outperformed the broader North American softwood market by a wide margin in the first half. That trend represented a stark reversal from the prevailing patterns evident through the previous three years.
The Southern Pine Composite Price averaged $445 through the end of June. If that trend holds through the second half, SYP prices will sink to the lowest annual average since 2019, before the pandemic. Monthly averages lagged the year-ago pace throughout the first half.
However, the first-half decline in the South was mild compared to the plunge in most other species. The Random Lengths Framing Lumber Composite Price averaged $411 in the first half, down $388 compared to the average throughout 2022.
The chart shows the RLFLC average was $75 higher than the Southern Pine Composite average last year. The margin was $91 in 2021 and $33 in 2020. Many traders note that the pandemic skewed normal price patterns, especially in 2020 and 2021.
Southern Pine’s $34 premium to the broader market in the first half is unusually wide by pre-pandemic historical standards. From 2010 to 2019, the decade prior to the pandemic, the Southern Pine Composite averaged higher than the RLFLC five times. The broader North American market outpaced the South an equal number of years during that time frame.
The gap between the two composites spanned $11 or less seven of those 10 years and expanded beyond $30 only once, in 2016.
Southern Pine prices resilient against market conditions
Southern Pine’s price strength relative to other species appears somewhat remarkable to many traders, given that production in the South has increased steadily in recent years while output has faded among other North American species, especially in Canada.
Further, a historic surge in European Spruce imports in the first half appeared to impact the Southern Pine market more than other North American-produced species, especially narrower widths.
Southern Pine’s premium to the broader market narrowed in the second quarter. The Southern Pine Composite average was $52 higher than the RLFLC in March and maintained a $51 premium in April. The gap narrowed to $22 in June, when the RLFLC averaged $406 compared to the Southern Pine Composite of $428.
Most Southern Pine buyers anticipate a cautious, conservative tone to define trading through the balance of 2023, much as it did in the first half.
Mixed signals in the housing market and ongoing uncertainty in the broader economy have kept Southern Pine buyers guessing about the market’s future direction throughout the year.
European Spruce imports have eased in recent months from the record pace evident in the first quarter. Myriad other factors, however, will figure prominently in second-half price trends.
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