August 7, 2020 at 1:00 p.m. EDT
Updated September 3, 2020 at 10:30 a.m. EDT
Lumber prices have recently skyrocketed due to significant shortages of the commodity, a shortage that has been made worse by tariffs on wood from Canada. Thus, North American builders are researching alternatives to wood. Some are switching to cold-formed steel (CFS) framing and trusses on their projects.
“Functionally, the cost of cold-formed steel has always been competitive with wood,” says Larry Williams, executive director, Steel Framing Industry Association (SFIA). “But right now, builders can get the quality and superior performance of steel and a huge savings on framing their projects.”
Framing lumber up 130%
The Random Lengths Framing Composite Price came just short of $900 per 1,000 board feet for the week ending August 28, 2020, according to the National Home Building Association (NAHB)’s. The price had reached a low point of $348 for the week ending April 10.
- In mid-August 2020, lumber prices had skyrocketed by 130% from mid-April levels, increasing the cost of a single-family home by more than $16,000, says NAHB Now.
- Lumber prices dropped in February and March due to stay-at-home and social distancing measures enacted by state and local governments. At the time, the lumber industry projected that housing would be adversely affected by the pandemic, and the mills depleted their inventories, says NAHB Now.
Housing boomed, however, and the “mills weren’t prepared,” says MarketWatch in the article, “Lumber prices have skyrocketed — and that’s bad news for home buyers.” The situation is significant because, according to MarketWatch, framing lumber makes up roughly 20% of the materials cost of building a home.
CFS costs much less than wood
Builders of both residential and nonresidential projects featuring wood framing now find an opportunity to flip wood for steel on their projects.
“Contractors are researching wood and steel prices,” says Pete Wilhelms, vice president of marketing and product development, Negwer Materials, Inc., a St. Louis, Missouri, supply yard and CFS truss fabricator serving eastern Missouri, southern Illinois and northern Arkansas. “There are budgets for projects out there, and some contractors are hoping to either save money or are looking to bring owners an alternative construction practice — steel.”
Wilhelms gives the example of a wood truss package for a small, single-story commercial building mansard truss. The package was priced at $9,800 when the contractor bid the work. But when it came time to order, the wood truss price had ballooned to $16,900. Negwer Materials’ price for CFS trusses came in at $11,900, and the truss component for the job flipped from wood to steel.
Williams says that wood framing shortages and skyrocketing wood prices could even “blow away the labor cost differential of wood and steel for building single-family houses.”
“A home framed with cold-formed steel has generally had a 1% cost premium,” Williams says, “but with this surge in lumber prices steel framing is clearly going to cost less and offer a higher quality, more durable home.”
He says a builder under contract to build so many homes for a developer and faced with current wood price levels would have to seriously consider using cold-formed steel as an alternative to wood framing.
Study: Cost of Steel v. Wood
A recent study sponsored by the SFIA, “Costs to Build with Cold-Formed Steel Versus a Wood-Framed Building,” addresses framing costs on behalf of architects, building owners, and general contractors.
While the research was completed before the current spike in wood prices, “Costs to Build” establishes that CFS framing and wood framing costs in mid-rise structures are essentially the same, when construction insurance premiums associated with using the selected material are included.
Of course, the current skyrocketing prices of lumber make CFS framing the clear favorite from a pricing point of view right now.
Williams says the SFIA has gathered pricing information and has issued a bulletin associated with the “Costs to Build” report.