MARKET INSIGHTS
Pressure from treated lumber Shortages and high price points cause disruption in pressure treated lumber dynamics. By Andy Carlo
P
ressure treated lumber was both a blessing and thorn in the side of pro dealers in 2020. COVID-19 regional lockdowns pushed DIYers to do more while stuck at home. The end result was a massive surge in demand for treated lumber. As home improvement projects took hold in the spring and summer months, including new decks, fencing and swing sets, the price of pressure treated lumber soared sky-high while overall supply became scarce at times.
But it appears that the cost of treated lumber is settling back down to lower price points in the fall season. Now it’s a question of what’s ahead for treated lumber in 2021 and how do dealers respond? In mid-April of 2020, pressure treated lumber began a ride that saw materials rise week after week until mid-September before reaching all-time-high price points. The overall cost increased by about 200% during that span.
For example, treated 2” boards reached a price level well over $1,000/ MBF (1,000 board feet) while decking hit levels as high as $2,000/MBF. Timbers also increased by as much as 175%, reaching over $1,000/MBF. Prices began to drop harder than anyone anticipated in September, however. According to Angie Maxwell, treated products manager at LBM Advantage forest products and building materials buying group, the price points prompted some dealers to allow their pressure treated supply to run out rather than being stuck with high-priced lumber as prices began to recede. “Right now, everyone has very thin inventory,” Maxwell told HBSDealer. Some of what triggered the price drop was a sizeable drop in demand. Many of the projects that might have taken place during the fall building season were already completed in summer and spring. Additionally, suppliers have been able to play catch up with inventory levels and now sit at a more comfortable position than where they were in the summer months. During the height of the price climb, suppliers weren’t in a solid position and in some cases found difficulty obtaining the chemicals needed to treat lumber. This caused dealers to not know when they would actually receive orders. And when orders were delivered, treated lumber was quickly out the door to job sites. “Multiple variables now have to be weighed by treaters and dealers alike,” said Steve Sallah, CEO of LBM Advantage. Sallah points out that existing home sales have been strong, however. That translates into repair and remodel projects including new decks. Remodelers were also impacted by lumber shortages in the third quarter 2020 saw sky-high price increases for pressure treated lumber.
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NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER
HBSDealer.com
