The overall problem with softwood lumber is total available timber for harvest especially in BC. Spruce beetle killed a lot of trees in BC and into AB many were harvested quickly and turned into lumber rather than leaving them to rot.
Shipments from retail started to increase last year immediately after lockdowns started and never slowed down, very small seasonal decrease but nothing compared to historical norms.
There was no buildup of inventory that normally happens in Q4 and Q1 so prices remained firm.
Little chance prices return to historical lows a new low, higher than anything before, could be seen but not likely before Q4 2021. If interest rates remain low and housing demand in the US continues as high as it is, the market will not drop in Q4 but will remain high.
Mills are paying more and more for logs weekly, it is an open bidding process for anything that is not on the mills tenured land. Provincial governments in need of revenue are benefiting from the increased prices for logs from crown land - they need the revenue.
Canadian companies continue to buy mills in the Southern US spending money to upgrade the efficiency and making those mills more and more cost competitive. They are actually counting on getting money back from the duty being held in trust currently by the US government. Imagine putting money in an account you can't touch that the customer paid (duty price is built into the selling price shipping wood to the US) then getting probably 2/3 to 3/4 of that back in a massive cheque. Then taking that money and buying assets in the US and making even more money.
Shortage of supply will continue to keep prices high. If we could get more logs, make more lumber, and sell it today we would there is just not enough of anything in the supply chain (logs, loggers, logging trucks, people to work in the mill, available time to produce in a mill, trucks to ship to market, etc.)
Every forest product or related product is in the same situation. Even composite decking is on allocation
For the first time in over a year I heard a story of a US based customer being offered lumber to buy and saying "no thanks." They were worried they would not be able to resell it. That is ONE retail account out of thousands.
If you are considering a project and find someone has inventory to supply it my suggestion, buy it now do not wait it will get more expensive or there will be no inventory available
