Southern yellow pine prices outperformed the broader North American softwood market in the first half of 2023

The resilience of SYP surprised the market with a stark reversal of the patterns from previous years

Southern Pine lumber prices outperformed the broader North American softwood market by a wide margin in the first half. That trend represented a stark reversal from the prevailing patterns evident through the previous three years.

The Southern Pine Composite Price averaged $445 through the end of June. If that trend holds through the second half, SYP prices will sink to the lowest annual average since 2019, before the pandemic. Monthly averages lagged the year-ago pace throughout the first half.

However, the first-half decline in the South was mild compared to the plunge in most other species. The Random Lengths Framing Lumber Composite Price averaged $411 in the first half, down $388 compared to the average throughout 2022.

The chart shows the RLFLC average was $75 higher than the Southern Pine Composite average last year. The margin was $91 in 2021 and $33 in 2020. Many traders note that the pandemic skewed normal price patterns, especially in 2020 and 2021.

Southern Pine’s $34 premium to the broader market in the first half is unusually wide by pre-pandemic historical standards. From 2010 to 2019, the decade prior to the pandemic, the Southern Pine Composite averaged higher than the RLFLC five times. The broader North American market outpaced the South an equal number of years during that time frame.

The gap between the two composites spanned $11 or less seven of those 10 years and expanded beyond $30 only once, in 2016.

Southern Pine prices resilient against market conditions

Southern Pine’s price strength relative to other species appears somewhat remarkable to many traders, given that production in the South has increased steadily in recent years while output has faded among other North American species, especially in Canada.

Further, a historic surge in European Spruce imports in the first half appeared to impact the Southern Pine market more than other North American-produced species, especially narrower widths.

Southern Pine’s premium to the broader market narrowed in the second quarter. The Southern Pine Composite average was $52 higher than the RLFLC in March and maintained a $51 premium in April. The gap narrowed to $22 in June, when the RLFLC averaged $406 compared to the Southern Pine Composite of $428.

Most Southern Pine buyers anticipate a cautious, conservative tone to define trading through the balance of 2023, much as it did in the first half.

Mixed signals in the housing market and ongoing uncertainty in the broader economy have kept Southern Pine buyers guessing about the market’s future direction throughout the year.

European Spruce imports have eased in recent months from the record pace evident in the first quarter. Myriad other factors, however, will figure prominently in second-half price trends.

Want to learn more about the lumber market, prices, or forecasts? Check out our dedicated page for timber/lumber, other wood products, or speak to our team about accessing our news, analysis, forecasts and more.

What to read next
The recent volatility of wood product raw materials prices significantly impacts the US housing market, influencing both demand and supply in construction. With pressure mounting in the framing lumber and structural panel markets, the fluctuating cost of these essential materials creates a ripple effect affecting pricing, project timelines and ultimately the availability of new homes. […]
Across the country, many would-be homebuyers wait with bated breath for interest rates to make a meaningful drop before they either purchase their next home or their first house. Persistently elevated rates have made it nearly impossible for lower-income mortgage applicants to qualify for financing. Meanwhile, those who purchased or refinanced a loan while record-low […]
Random Lengths has concluded its industry consultation, will add delivered Dallas fingerjointed stud prices and make changes to veneer reporting.
North American softwood lumber exports to offshore destinations posted mild gains in the first quarter, sustaining the momentum evident in the second half of 2023. Want to predict the future of the lumber market? Learn more about our short-term and long-term forecasts and asset analysis for the global forest products market today. Learn more. Canadian exports overseas reached […]
What factors are driving the significant downturn in US housing starts, accompanied by a decrease in building permits?
Paracel’s current 103,000 hectares (ha) of eucalyptus plantations are sufficient for the start-up of the company’s planned new greenfield mill in Paraguay by 2027, chief executive officer Flavio Deganutti confirmed to Fastmarkets in an exclusive interview. Paracel has continued to make progress in its project to build a new 1.8-million-tonne-per-year bleached eucalyptus kraft (BEK) pulp […]