U.S. lumber prices reached unprecedented highs in the second quarter of this year, according to Wood Resources International. The costs for 2×4 framing pine lumber in the U.S. South averaged almost $800 calculating cubic meters (m3) in May, up from $210/m3 as recent as February 2020 and nearly four times as much as the 20-year average price for southern yellow pine.
The costs for sawlogs, typically accounting for 60% to 70% of the production costs when manufacturing lumber, have seen only relatively small adjustments throughout the first half of 2021 in the key lumber-producing regions of North America, according to the Wood Resource Quarterly. The report said the favorable lumber price/sawlog cost ratio has resulted in record-high profits for lumber companies across the continent.
Canadian lumber prices have spiked similarly to the U.S. prices, with record highs in May followed by sharp declines during June through August. Canada and the U.S. reduced lumber exports overseas in the first half of 2021 due to the strong U.S. lumber market. The most significant decline came in North American shipments headed to China, which fell from over 1.9 million m3 in the first half of last year to only 820,000 m3 in the in the first half of 2021.
The costs for lumber in China reached their highest levels on record. Canadian lumber prices have gone up the most as they have been heavily impacted by the alternative market in the U.S., according to the report. From late 2020 to July 2021, Chinese import prices for lumber from British Columbia were up about 60% during this period.
The high cost of lumber this year has been driven in large part by a boom in residential housing construction.