Have Lumber Prices Bottomed Out?

The price of lumber rocketed from around $400 per thousand board feet in February 2020 to an all-time high of over $1,600 in early May.

"Wow!" is an understatement.

In the thick of the COVID pandemic, frustrated consumers with nothing but spare time generated a tsunami of home renovation projects. Many decided to move out of the city and build new homes in rural communities. Faced with unprecedented logistic circumstances, sawmills simply could not ramp up production to keep up with the exorbitant demand.

Q1: Has the market finally bottomed out?
Q2: Will pricing ever return to normal?

Supply and demand is slowly becoming more in sync. Plywood pricing is beginning to stabilize and the pricing of certain lumber products is inching downward. However, certain factors will likely hinder and slow pricing from returning to pre-COVID levels. Consider higher transportation costs (trucking, rail, and containerization), higher tariff rates on imported wood products, and higher costs for the resins needed to make adhesives for panel products. These factors, and others, will ultimately influence availability and ultimate market pricing for virtually all wood products for some time.