Lumber market observers are talking about prices this month, and for good reason: After peaking at record highs in mid-summer, framing lumber prices have taken a plunging dive, taking suppliers and dealers by surprise.
The well-known Random Lengths composite framing lumber index, an industry benchmark that aggregates the prices of popular grades and dimensions of wood, hit an all-time high of $582 per 1,000 board feet in June. By mid-October, the index had fallen to just $373.
Hurricanes often cause lumber price spikes, but Hurricane Michael’s devastating strike on the Florida Panhandle barely registered as a blip on lumber markets. “Hurricane Michael’s legacy in the softwood lumber and panel industries may be its lack of impact on markets,” commented Random Lengths. Big-picture housing market forces could be the reason, Random Lengths noted: “Traders looking for answers to the third-quarter meltdown in wood products prices can now credibly add a slowdown in U.S. housing starts to the list of factors.”
