A resurgence in U.S. housing construction is still expected to boost lumber prices, but perhaps not as high as had been expected this year.
A 21 percent drop in the cash price since mid-March and lower future prices have prompted several analysts to trim about five percent off their 2013 price forecasts. Western SPF (spruce-pine-fir) softwood prices are now expected to increase 20 percent, on top of the 16 percent increase realized in 2012.
RBC and CIBC now expect prices will average between US$350 and US$360 per thousand board feet in 2013, which is about $20 lower than earlier forecasts, but up from US$299 in 2012.
Analyst Paul Quinn of RBC Capital Markets maintained his outlook for 2014 at US$400, but lowered his price in 2013 to US$350, from US$370. He also reduced his forecasts for OSB (oriented strand board) and plywood.
A 10 to 15 percent increase in North American production in most regions and weak exports is “spelling trouble in the short-term,” Quinn wrote in a report.