The lumber market could be entering a buyer’s market, Justin Binning and Ken Timmins shared on the Structural Building Components Association’s (SBCA) most recent Lumber Connection podcast. Binning, a trader and southern yellow pine products department head with American International Forest Products (AIFP) believes a swift correction in the market is possibly on the horizon.
“I want to tread lightly. I’m not saying the sky is falling here by any means, but I am saying that over the next two weeks to 30 days [it will be] a buy window, there’s going to be opportunity, a little easier to buy some wood, some items are going to be a little tight and hard to source,” Binning said on the podcast, recorded on March 15, 2021. “But there will be wood entering the market. I’m looking at a $100-$300 type of price correction, depending on the item over the next 30 days. But I think that stops very quickly at some point, and once that is achieved, we start going the other way again.”
Timmins, a trader with AIFP, also believes a price correction is on the horizon, though it likely will be temporary.
“If you’re not attacking the market, you’re not even going to catch a sniff of any correction,” Timmins said. “You’ve got to be active and on the ball when it happens. It’s not going to last very long.”
Timmins and Binning both highlighted transportation constraints and high transportation costs across the country. In the south, Binning said rates on trucks have increased from $0.50 to $1.00 a mile. Timmins said trucking remains tight in the west, with costs ranging from $3.50-$4.00 a mile. While price increases are common during the spring building season, the “cost of transportation is up significantly all across the nation,” according to Binning. Timmins noted that the west is also having trouble with rail cars.
“Where it used to be 1-2 weeks to get [rail] cars in normal circumstances, we’re looking at 4-5 weeks now,” Timmins said. “So that’s getting pushed out quite a bit. It’s becoming a very significant factor in the mountains states and California.”
The Lumber Connection podcast, recorded every two weeks, focuses on the latest trends in North American lumber markets. On the podcast, hosted by SBCA managing director Molly Butz, experts provide insight and provide timely commentary on the many factors impacting the supply and demand of the lumber used in structural components, with a focus on lumber species and grades most commonly used in the component manufacturing industry.
