PRINCE GEORGE—It hasn’t been a stable year for lumber. Back in May, the price of softwood lumber peaked at $1,630 before it began to drop in the summer.
As of October 1st, the price of softwood lumber is sitting at around $540 per thousand board feet.
According to Russ Taylor, wood product consultant, global prices are resetting. Yet, in B.C., prices are a little bit higher.
As of October 1st, the price of softwood lumber is sitting at around $540 per thousand board feet.
“The B.C. Interior is the highest cost producing region in North America. Yet, they have some of the best mills in the world, so how can that be?” said Taylor.
Taylor says that’s due to the government’s price of timber.
“The government cost of timber, the standing timber–which is called the stumpage fee, the licensing fee to the government. The formula which does not work when prices are volatile have proven that to be exactly the case in third quarter,” said Taylor.
The stumpage prices are set using lumber prices from previous quarters. So, while this quarter lumber is low, the government is giving mills prices from when lumber was more than a thousand dollars.
Meaning that mills are operating at a loss and it’s a disadvantage that Taylor believes will carry through the new year.
However, when it comes to the consumer side of things, the price is still low. Businesses like Rona Capital Supplies has seen a steady trend of customers.
“”Really starting end june, early july, prices dramatically drop 50, 60, 70 percent. Since the last probably six weeks, they’ve started to bounce back up a bit, bit of a bottom bounce effect. Lumber going up anywhere from 20 to 30 per thousand. Sheet good, plywood’s stable–I know it’s been quite stable also,” said Al Jones, General Manager of Rona Capital Supplies.
Jones says that months ago, orders were backed up by two to three months. Now it’s dropped down to only one.
Taylor believes that it may take til about 2022 Q2 for lumber prices to stabilize.
