After a month of modest gains in the North American SPF market, the rally seems to have reached the end of its strength. This week, the local main varieties of secondary 38X89 and 38X140 did not rise, only the small varieties of wide plates rose by about 1%, and the growth of tertiary materials basically fell to below 1%. Affected by the exchange rate, the size of the economy class fell by US$1 per cubic metre. It seems that in the context of high mortgage interest rates and low construction volumes, it is indeed an unrealistic luxury for the price of building materials to rise sharply. Dealers across North America are once again in wait-and-see mode after a brief restocking. However, because of the low production volume, Canadian factories are still relatively optimistic about the market outlook and believe that a sharp decline is unlikely.
This week's trend in European materials in the eastern US states is broadly similar to that of Canada's SPF, but more weak. The price of dry-planed selected secondary timber 38X89 and 38X140 fell by about 1 percent, while the price of wide boards with a width of 184 mm and above remained largely unchanged. With the arrival of bulk carriers carrying European materials as scheduled, the inventory is relatively abundant. After that, the market is expected to continue to rise and fall with SPF.
The latest U.S. construction industry statistics were released on Tuesday: according to February data, the forecast number of annualized housing permits issued in 2024 was adjusted to 1.518 million, up 1.9% from the number forecast in January and 2.4% from the same period last year. The annualized number of construction starts in 2024 was adjusted to 1.521 million, an increase of 10.7% from the number forecast in January and an increase of 5.9% from the same period last year. Existing home sales surged 9.5% in February, adjusting the 2024 annualized forecast to 4.38 million units, but still 3.3% lower than the same period in 2023, with a median home price of $384,500 per unit, up 5.7% from the same period last year, marking the eighth consecutive month of increases. The 30-year mortgage rate remains high at 6.87% per annum, and there doesn't seem to be much room for decline until the Fed cuts rates. Based on the above macro data, it can be seen that the state of the North American construction industry is still stable in the near future, but it is difficult to get out of the trough for a while. Barring unforeseen events, the timber market in the second quarter is likely to be similar to last year's as a whole.
The Chicago Mercantile Exchange timber standard futures contract in May experienced a large ups and downs of $624 and $602 last week, and opened directly to $596 on Monday, breaking the 600 mark, but then the market gradually returned to rationality, the price has returned to above 605 in the morning, and has broken through $611 again in the afternoon, and the fluctuation range of the whole week has been significantly smaller, basically around $608, and has not exceeded its range of 1% above and below. Friday's close price of $609 is still above the spot.