February 2021 Lumber and Commodity Report
The RoMac Building Supply Wood Commodity Index (Index) for February 2021 jumped 8.7 percent adding almost $75 per thousand. High single-digit increases were common in both lumber and sheathings as the markets tried to shake the grip of the winter weather. If anything, pricing over this time period should have dropped or flattened because of the winter weather, and it is reasonable to believe as the spring thaw starts pricing will begin to escalate.
The dimensional wood portion of the Index increased 8.3 percent with spruce jumping 7.4 to 12.0 percent while wide-width pine 2×12 increased 9.4 to 11.5 percent. 2×4 treated pine remained flat and showed signs of peaking last month. While some items have longer lead times and higher quality wood is much harder to find, the shortages from a few months ago have eased. It remains to be seen what the warmer spring weather will bring.
The sheathing sector of the Index jumped 9.0 percent as CDX pine plywood added $115 per thousand, or $3.68 per sheet, while OSB sheathing was up $55 per thousand, or $1.76 per sheet. Because the price is so much higher than normal, the 7.4 percent increase in OSB translates to a larger increase per piece. OSB is getting to be an issue with supply and spot shortages are occurring in mid-February.
During the snow days of January and February, the wood markets remained very high and offered little pricing or supply relief. This does not bode well for warmer spring weather and a spike in demand. Builders should bid items closely and update pricing every other week. Do not expect dealers to hold pricing long-term. Plus, as the COVID-19 vaccine becomes plentiful and the pandemic resolves itself, expect an unleashing of pent-up demand.
My best advice to builders—plan ahead and buy early.
Don Magruder is the Chief Executive Officer of RoMac Building Supply in Central Florida and he is a former President of the Southeast Mississippi Home Builders Association, and past Associate Vice President of the Home Builders Association of Lake County. To contact Magruder, email him through our contact page.