A sharp increase in installations of technology throughout the South for machine stress-rated (MSR) lumber combined with expected declines in production of MSR lumber in Canada are helping minimize the potential damage from this summer's reduction in design values for visually graded Southern yellow pine, a timber consultancy says.
Forest Economic Advisers (FEA) reports in its latest newsletter that 14 new MSR graders have been installed by Southern yellow pine mills just since March and another six are scheduled to be installed by Dec. 31. These add to the 22 machines previously installed, FEA says, “So … there will be more than sufficient MSR capacity to offset reduced demand for visually graded Southern pine as well as Canadian SPF [spruce-pine-fir] MSR production.” The only exception to that, it said, involves 2x3 lumber typically used in flange stock for I-joists.
MSR lumber is used primarily in floor and roof trusses and in I-joist flanges, so demand for it closely tracks new construction. Roughly 2.97 billion board feet (bbf) of MSR lumber were produced at the housing market’s peak in 2005, but by last year production had shrunk to 1.34 bbf.
Visually graded Southern yellow pine (SYP) traditionally has been preferred over MSR in the South for making trusses because of its exceptionally high design values compared to other species and MSR. Design values are the strength characteristics that engineers and fabricators count on when producing trusses. But that status took a hit in June when SYP’s design values by as much as a quarter for visually graded lumber.
On the other hand, MSR lumber didn’t see its design values reduced because each piece of MSR lumber has been evaluated by mechanical stress rating equipment–in addition to meeting visual requirements–before it is assigned design values. A lot of Southern mills hadn’t bothered to spend money on MSR machines because, even when it was visually graded, their product enjoyed a clear lead over other species. Once visually graded SYP’s design values were reduced, concerns arose that Southern timber mills would lose market share.
Three factors are minimizing any potential decline, FEA wrote in its inaugural MSR lumber forecast. The first is a rise in demand as housing revives. By 2016, production should top 2005’s high-water mark and hit 3.34 bbf, FEA predicts.
The second factor is the installation of all those MSR units in the South, because it will enable those mills to keep producing material for trusses and I-joists.
The third factor involves Canada--particularly British Columbia, Alberta and Quebec--where more than three-quarters of the MSR lumber has been produced during the past five years. Conditions will change dramatically over the next five to 10 years, FEA said, because by that time the mountain pine beetle will have significantly reduced the amount of Lodgepole pine in British Columbia. Lodgepole pine is the major pine component of SPF in the province.
Meanwhile, Quebec’s parliament has approved a bill that could cut the annual allowable cut of timber in the province by nearly one-eighth starting next year, FEA says, and a second potential conservation effort called Plan Nord could take another 6% out of the annual allowable cut starting around 2016.
“These reductions in MSR capacity out of North America’s biggest MSR-producing regions will be concurrent with surging demand for MSR as residential construction markets rebound in 2014-2016,” FEA wrote in a statement to ProSales this week. “Increases in residential construction will cause MSR demand to surge. This demand/supply imbalance will cause SPF MSR prices to rise and encourage many MSR consumers to switch from SPF to Southern pine.”
SPF production tops SYP production of MSR by roughly five to one today, FEA estimates. By 2016, it believes the ratio will be closer to 3:2.
The one area where SYP MSR is unlikely to be used is in the creation of 2x3 dimensional lumber for I-joist flange stock, FEA says. In that case, some I-joist producers will rip 2x6 MSR or switch to LVL (laminated veneer lumber), it predicts.