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Thread: Construction Lumber prices

  1. #1
    Join Date
    Aug 2009
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    Colorado Springs
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    325

    Construction Lumber prices

    This is good news for all of us shop builders!

    https://www.wsj.com/articles/lumber-...rs-11623749401

  2. #2
    Join Date
    Mar 2003
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    SE PA - Central Bucks County
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    I sure hope this trend continues as it will make some choices for my future shop a little easier.
    --

    The most expensive tool is the one you buy "cheaply" and often...

  3. #3
    Join Date
    Jan 2004
    Location
    Lewiston, Idaho
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    I feel sorry for those in the process of building something right now. I noticed a guy building a shop in the next block.. he dug the trenches for the foundation, poured the foundation and got all the landscaping done. The foundation has been waiting for a month and a half now but still no lumber in sight. With the prices as they have been recently, I can understand why all the prep work is done.
    Ken

  4. #4
    There've been no less than 3 threads on this topic recently, citing at least 3 different high-profile news outlets delivering this message. As mentioned in previous comments on those - how fast do you think your local supplier will admit to this trend? Nothing dropping in my neck of the woods except your jaw when you get the bill.

  5. #5
    Join Date
    Mar 2018
    Location
    Orwell, NY
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    587
    The drop seems to be in futures for July delivery, if I understood the article, so it probably wouldn't trickle down to the retail customer till July or August at the earliest. Still it's hopeful if the price comes back down in the foreseeable future.

  6. #6
    Thanks for clarifying, Zachary. I did not read that entire article. Got my fingers crossed, and working on a better attitude about it all. (You should have seen the first draft I almost submitted!)

  7. #7
    Join Date
    Mar 2003
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    SE PA - Central Bucks County
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    Anything you see in the press relative to financials on this kind of market is generally talking about "futures"...what the trend appears to be. One important point in the part fo the article that's visible without a subscription is that there is that the downward change for lumber futures has been dropping for a few months now. It's not a one time thing. There is still supply chain challenge including logistics...transmport remains pretty screwed up.
    --

    The most expensive tool is the one you buy "cheaply" and often...

  8. #8
    Join Date
    Nov 2006
    Location
    N.E. Ohio
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    5,826
    I haven't seen prices fluctuate like this since 1971/1972, during the OPEC embargo.
    We were changing prices on stuff every day back then.
    My granddad always said, :As one door closes, another opens".
    Wonderful man, terrible cabinet maker...

  9. #9
    Join Date
    Jun 2015
    Location
    Northern California
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    391
    I have a feeling this is going to be similar to gasoline prices. When oil futures experience a steady and significant decline, the price at the pump creeps down gradually anywhere from a few pennies to no more than twenty cents. But if oil futures rise fractionally, gas prices soar, often increasing by 20-35 cents a gallon in a day. I live in California, where gasoline prices are the nationís highest, but percentage wise and strategically I think itís the same throughout the country.

    I think the buying public better get used to paying a lot more for things than before Covid. Once prices go up to the levels weíre currently seeing, they just donít come down very much.

  10. #10
    Join Date
    Apr 2018
    Location
    Cambridge Vermont
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    1,604
    We are starting to get to the point where people aren't going to start a new projects up north. Not yet but soon. It's not going to just stop but demand will slow down some. It's not going to have an immediate impact but it should help. Also around here the mills have been going full speed. That'll also help. But all the smaller lumber yards who bought wood at the higher prices will need to sell off what they have to avoid selling at a loss so that'll slow the price drop. But they will be forced by the likes of Lowes who can absorb the loss (and the money they banked raising the prices up as the futures prices went up) to drop prices. I would be happy just seeing 8' 2x4s under $5 in the near future.

  11. #11
    Join Date
    Feb 2010
    Location
    Collegeville PA (30 min west of Philly)
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    I checked Lowes and local lumber yard today for a small order of pressure treated... Lowes has stock and has the lower price... lumber yard was out of stock and would have charged more.

    Now... I would greatly prefer to go to the lumber yard as their material has always been far superior compared to big box. But, availability + price will have me at Lowes this time.

    $45 for a 2x12x8 PT and $11 for a 2x4x8 PT. Ugh, that's a lot for a couple boards.
    - Bob R.
    Collegeville PA (30 minutes west of Philly)

  12. #12
    Join Date
    Dec 2006
    Location
    Mesa, Arizona
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    1,666
    Yesterday, I listened to a podcast that provided a lot insight into the current volatility in lumber prices. I'll link to it below. Here are a few things that were new to me:

    1 - In 2019, lumber prices were artificially low. The forests in NW Canada were ravaged by pine beetles. This left thousands of acres of mostly dead pine trees. Rather than let all this lumber go to waste, the Canadian lumber companies built or expanded their lumber mills and all that deadwood was turned into lumber. Millions of board feet were produced above and beyond what we normally consume. This lead to a large oversupply and prices dropped.

    2- In 2020, the lumber industry was in the process of shutting down a lot of lumber mills -- partly in response to what was discussed above. Many of the mills built to handle the extra timber harvested as a result of the pine beetle devastation, were built near where all that standing dead timber was located. Once that timber had been harvested, the plan was to shut the mills down. In addition, because of the glut in lumber, many other mills in North America were also shuttered.

    3 - In response to COVID, additional lumber mills were shut down (or reduced production). The industry expected much lower demand as everyone stayed home in response to the pandemic.

    4 - Instead of falling, lumber demand went up. A lot of homeowners used their time at home to build and remodel. (I finally insulated my shop. I also installed 1/2" sanded ply to the interior walls. I'm sure many of you did something similar.)

    https://www.youtube.com/watch?v=c0Vhz8vbmDE&t=1525s

    5 - It can take two years or more to get a lumber mill back into production after it's been shuttered. Not only does all the equipment need to be made ready (purchased and installed, if the old equipment was sold off), the lumber mill needs to establish a supply of timber, and it needs to assemble a workforce. Many of their skilled workers have already found new jobs and may be unwilling to return.

    One last thing, this is not from the podcast: Retail prices are often 'stickier' than are wholesale prices. Many retailers are reluctant to pass along price temporary increases to their customers. They don't want to needlessly tick off their customers. So, in response to a price increase, the retailer may slowly raise its prices until its margin recovers. Retailers are even more reluctant to pass along price decreases! They have a lot of money invested in their lumber inventory. They are very reluctant to sell that inventory at a price that's lower than what they paid for it. That's not necessarily a smart decision, but it is human nature.

    Years ago, my parents moved to a small town in south-central Utah. The local Ford dealership had 'new' three-year-old cars sitting on its lot. The dealer refused to discount those cars below the sticker price. He had current model year cars on the lot. He was trying to sell the older cars for the same price as the current year models! Not a smart decision, but definitely consistent with human nature.
    Last edited by David Walser; 06-21-2021 at 11:57 AM. Reason: Add link
    David Walser
    Mesa, Arizona

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