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Pacific Northwest Market Trends: February 2010

Picture of Suz-Anne Kinney Suz-Anne Kinney : February 1, 2010

Forest Industry

Lumber prices have increased in recent weeks, as buyers seeking to replenish supplies found the pipeline empty. As harvest levels are very low, this trend will add even more pressure on mills to secure logs.

For December, Douglas fir log prices were up by double digits across the Westside, with sharper increases in Western Washington. The lowest December regional log prices were in Southwest Oregon, as some major buyers scaled back outside purchases. Douglas fir and whitewood logs destined for Asian markets commanded premiums of around $ 100 per MBF over domestic logs.

Tonnage conifer pulpwood prices were flat across the region in December pending significant curtailments in pulp and paper. Increasing demand for hardwood pulp logs provided continued upward price pressure.

Northwest chip prices were level this past quarter. In a very unusual phenomenon, chip prices in the US South—driven by unfavorable weather, reduced supply and improved end-markets—are at or near the same price per BDT as Northwest wood chips.

Log price increases have been more subdued in the Inland Empire, with values flat to up slightly over the past quarter. Prices for red cedar sawlogs are up 7% from the previous month.

Across the region, logs are in limited supply as timber sellers hold back awaiting higher prices when lumber demand improves. Expect short supply to foster continued anxiety surrounding availability of logs and support rising lumber prices.

For more information on the Delivered Price Benchmark Service covering the Pacific Northwest visit www.forest2market.com/pnw-benchmark or call Gordon Culbertson at (541) 302-8010.