Excalibur Construction, Inc., Sheridan, Wy., used to order its building materials on a per-house basis. As of May, the firm was ordering materials by the semi-truck, even though bulk purchasing doesnโt solve all supply bottlenecks.
โThere are definitelyย longer wait timesย for getting stuff here,โ says Mykaila Jensen, project manager for Excalibur, in an article on thesheridanpress.com. โYou have to wait a couple weeks, and you might not even get all your materials.โ
In the Mountain West, where Excalibur Construction operates, wood studs that used to cost between $4 and $5, depending on length, in May cost between $15 and $17, according to Jensen. He says the cost of cold-formed steel (CFS) studs were about half that price, and his company was switching to cold metal framing on many projects.
Prices higher than headlines suggest
Nationally, lumber prices have soared โ from $349 per thousand board feet in April 2020 to $1,514 in May 2021,ย according to NPR. Since the peak, the composite price index for wood framing materials compiled by Random Lengths has tumbled by 50% to $770 per thousand board feet.
The see-saw action of the price of wood during the past year, as well as the limited supply of wood, have made it hard for many construction companies. Theyโre trying to figure out how to manage their work orders when material prices and availability are in such flux.
โThe challenge right now for a builder is, if youโre asked to give someone a price for a home, itโs very difficult,โ says Chuck Fowke, a Florida homebuilder, as reported by NPR. โWeโre used to having prices change every six months or every 12 months. Weโre getting price changes every two weeks.โ
And even though lumber mill prices have fallen 48% since May, the NAHB says the prices paid by builders have only declined by a fraction of that amount.
โThe disconnect โ which has always existed โ is inherent to the lumber supply chain,โ says the National Association of Home Builders, article, โWhy Builder Lumber Prices Remain Higher Than Headlines Suggest.โ
In other words, as the price declines began grabbing the headlines the prices of lumber packages quoted to builders have remained at record highs, NAHB says. In supply-and-demand jargon, the prices paid by builders are still โsticky.โ
โThis dynamic is primarily due to [lumber] dealersโ inventory carrying costs and potentially large differences between the price at which inventory is bought and sold,โ the NAHB says.
In addition to the high price of wood studs, the price of sheathing material โ oriented strand board, or OSB, a plywood substitute that used to be cheap โ is up 97% since the start of the year. In June,ย OSB traded at $1,527 per thousand board feetย โ a 97% increase since the start of 2021, according to Bloomberg data.
Josh Kammerer, president ofย Straight Cold Rollin, LLC, in Sundance, Wyoming, says that OSB has gone from $8 to $80 a sheet in his marketplace.
Steel is strong, sturdy, easy to use
Despite this climate of uncertainty, sources say that CFS-framed projects continue to grow in numbers.
Kammerer, for example, says orders for his companyโsย steel-framed pole barnsย sold at a brisk pace since the pandemic began, although sales have declined somewhat of late.
โWhen wood prices went through the roof, I sold a bunch of pole barns,โ Kammerer says. โWe were competitive โ really competitive.โ
He says heโs sold CFS trusses for health care projects, such as a Veterans Administration skilled nursing facility in Buffalo, Wy. Kammererโs firm also has CFS projects with the Wyoming Fish & Game Department and the Wyoming Department of Transportation.
โWeโre doing lotโs of cold-formed steel trusses and cut-to-length steel studs,โ he says. โWe have a lot of work right now.โ
Indeed, CFS-framed projects command attention in the current inflationary market, because steel framing offers significant benefits over wood and concrete framing.
- Steel studs are strongย and CFS-framed structures areย sturdy. โItโs amazing how sturdy it is once itโs all locked together,โ Kammer said, about one of his pole barn projects profiled on BuildSteel
- CFS projects areย easy to build. Kammerer, for example, often uses untrained laborers to assemble his structures. Since CFS studs can be ordered pre-cut, the crews only need screw guns โ no measuring instruments or cutting saws โ to work
- CFS isย ideal for urban infillย projects, since CFS is lightweight versus a cast-in-place post-tension framing. For example, CFS framing saved $1.7 million over cast-in-place post-tension product, and gained an extra floor on an Ellisdale Construction project in Washington, D.C.
- Unlike wood, steel isย non-combustible. CFS framing can result inย insurance savings, such as lower buildersโ risk and construction insurance, ownership insurance costs including general liability, workerโs compensation and commercial property insurance
Higher duties on Canadian lumber?
Will wood prices continue to drop as they have since May? That remains to be seen. But some market forces at play, notesย The New York Times, relate to the long-standing trade dispute between the U.S. and Canada, a dispute that could send wood prices higher.
โSigns of diplomatic progress [regarding the trade dispute] have been scarce, and Canadian lumber producers may soon face higher duties,โ The Times says. โThe Commerce Department said last month [May 2021] that it tentatively planned to double the duties later this year, to 18.3 percent from 9 percent for most producers.โ
The move was cheered by the American lumber industry, The Times says.
Additional Resources
- Builders Look to Steel Framing as Lumber Prices and Delays Remain High
- Steel Capacity Increases as Lumber Shortage Continues
- The Pandemic Moves the Construction Industry Closer to Technology
Article cited from BuildSteel.org