April 2019 Lumber and Commodity Report



by Don Magruder, CEO of RoMac Building Supply

In last month’s update, I noted that price momentum from the first of the year was waning, and it’s continued over the last 30 days. The RoMac Building Supply Wood Commodity Index dropped 5.7 percent or $19.45 per thousand. Downward pressure was across the spectrum throughout all sizes and types of wood commodities. Since April 2018, the Index is down 34.1 percent or $166.05 per thousand. These numbers indicate a housing market struggling with demand, giving way to a growing concern about the spring selling season.

The dimensional lumber portion of the Index dropped 9.5 percent to $368.91 per thousand. Spruce studs were down 2.0-6.2 percent while dimensional 2×4 and 2×6 spruce took a significant hit in pricing. Depending on the length, drops in pricing ranged from $43-$75 per thousand for 2×4 while 2×6 spruce gave back $37-$74 per thousand. Spot pricing on availability seems to be the biggest driver.

Although the sheathing portion of the Index fared better, it was still down. Since March, sheathings on average were down 1.7 percent or $4.89 per thousand. All items but T&G plywood were down. CDX pine dropped $2 for 15/32” while 19/32” gave back $15. OSB sheathings were down $4-$6 per thousand. Since April 2018, the sheathing portion of the Index is down 36.8 percent or about $5.30 per sheet on average. That is a significant drop and illustrates how much these markets have deteriorated.

The lumber and sheathing markets should be strong at mid-April, not dropping. Some continue to use the weather as an excuse for the slow spring start. However, warm spring weather is occurring like normal. Unless there is a significant pickup in housing demand in the next 30 days to lift the wood commodity markets up, expect pricing to remain depressed. Will there be a spring home selling season? Some doubt it.

Don Magruder is the Chief Executive Officer of RoMac Building Supply in Central Florida (romacfl.com) 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 at don.magruder@romaclumber.com.