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Lumber Prices Going Up – Low-Grade Southern Pine Market Tightening

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March 23, 2012

A growing refrain from buyers of Southern Pine low grade is that supplies on the open market are tight, and prices continue to push higher.

While demand from industrial accounts and greater volumes being shipped overseas are factors in the up- swing in prices of low grade, a more recent factor is equipment upgrades made at SYP mills. While the recently approved changes in design values of #2 and lower grades of 2×4 don’t go into effect until June 1, some producers have already installed new equipment to prepare for the change.

“The design value ruling caused people who were on the fence to go ahead and upgrade their facilities,” said one SYP mill salesman, whose company has performed up- grades. Several new machines are available to sawmills, such as the machine visual grader (MVG) and linear high grader (LHG).

Some machines bend the lumber to test strength proper- ties, others use X-ray technology, and one uses a hammer- like device to test the wood’s density. The bottom line is that the machines improve sawmills’ efficiency. “It really improves your #2&Btr percentage, which consequently lowers your low-grade output,” the SYP salesman said.

Since the beginning of 2012, the reported price of #3 2×6 has gained 34% on the westside, and hit a two-year high. Steady demand has been a factor, but recent mill up- grades have also played a role. One eastside producer said

#3 2×6&wdr were his hottest-sellers last week. “I could sell all of it I’ve got and more, but we have very little for the open market,” he said.

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