Suz-Anne Kinney
The MarketWatch Blog is Transitioning to ResourceWise Forest Products
Forest2Market: July 14, 2023
Following impressive gains in lumber and plywood prices, Douglas fir log prices delivered to mills in western Oregon and Washington increased from $432/MBF to $528/MBF, up more than 20 percent since the beginning of the year. For May, Southwest Oregon led log price levels, with increases of 10 percent on Douglas fir during the month.
For the first time in several years, the premium for export logs nearly disappeared over the past month. From January to May 2010, the average log length for 2S Douglas fir delivered for domestic use in the Lower Columbia region increased from 33.5 feet to nearly 35 feet. This additional 1.5 foot of average length indicates that sawmills have been challenging exporters for higher quality logs. However, this trend is quickly reversing. Even as dimension and stud lumber prices decline, export demand remains strong for most Doug fir and hem-fir log grades. Over the summer, the export premium spread will widen, making life tougher for mills struggling to stay in the black.
Inland Empire log prices lag behind those West of the Cascade Range. Douglas fir and hem-fir averaged about $360/MBF short-log scale. In comparison to long-log scale, these prices are still 10-13 percent below Westside prices for the month. Post-breakup, prices have generally been higher, though prices in North Idaho have been more conservative than those in the southern counties.
Expect a dramatic reversal to the feverish paced run-up in Northwest log prices since January. Sawmill log prices are tumbling and June purchase orders are off substantially. The uptick was driven by scarcity in the supply chain. Since it has become clear that demand for wood products has not improved, however, lumber and plywood orders and prices have dwindled. Prices for many items have now settled back to first of the year levels. Announcements of major production curtailments around the July 4 holiday have been commonplace.
