Q1/Q2 2021 Lumber Market – Continued Volitivity
While “unprecedented” was the word of 2020, it appears that we will not be able to quickly abandon it coming into 2021. Particularly in regards to the lumber market.
After a brief drop this fall, prices are again shooting up. Supply continues to be squeezed due to pandemic-related closures and slowdowns at both the mills and in transportation. And demand isn’t showing any relief. Consumer retail, construction, new housing, and packaging needs are surging at historical rates.
Coming into Q1, lumber is regularly trading above published industry indexes, for all grades, species, and converted products.
Earlier this fall, there was speculation about the timing of a market correction or, at the very least, stabilization. Now, some industry experts are resorting to watch and report rather than speculate. During a recent industry update meeting, a 30+-year-tenured procurement specialist on our team remarked, “I’ve just never seen anything like this before.”
What does this mean for our industrial packaging customers? Unfortunately, finished good pricing will continue to fall in line with these market trends, which means prices are likely going up, to varying degrees, based upon your wood packaging solution. Packnet and our parent company, UFPI, are well positioned to continue sourcing material. However, it will be at rates reflective of the current market trends.
And what does the market look like for Q3/Q4? Sal Gilbertie , markets contributor for Forbes, explains that market volitivity is such that lumber futures, which are typically reliable for anticipating market conditions, are currently “far less potent than usual.” Gilbertie reports that “[t]here is undoubtedly much more price turmoil to come in the lumber markets, but right now the futures price curve isn’t providing many easily readable clues as to the future of overall lumber prices. Stay tuned.” (Source: forbes.com)
To learn more about the lumber market and it’s affect on wood packaging, please contact our experts to discuss.