Lumber prices in North America continued their decline from the 3Q 2018 with another quarter of substantial reductions. Average lumber prices for southern yellow pine were down 12% quarter-over-quarter in the 3Q 2018, which was then followed by a reduction of 17% in the 4Q 2018, as the WRQ reported.
With practically no change in log or chip prices, gross margins, and the EBIDTAs, have plunged in the Southern states, after having reach a 13-year high in the 2Q 2018.
However, the region's sawmill margins were still well above their ten-year average margin. With lumber prices continuing to decline faster than log prices in early 2019, profit margins have continued to slide in the 1Q 2019.
Sawmills in British Columbia, Canada, have also seen the prices for lumber in the US market come down substantially during the second half of 2018. Despite the weaker lumber market, sawlog prices still increased from the 3Q 2018 to the 4Q 2018 because of tighter supply and a rise in hauling costs. Sawmills saw their gross margins plunge to unprofitable levels and many companies decided to take market-related downtime in late 2018 and early 2019.
