Lumber buyers pay up or run out amid U.S. homebuilding surge
Marcy Nicholson, Bloomberg News VIDEO SIGN OUT
With U.S. lumber prices at fresh record highs, construction companies and wood wholesalers are buying just enough to get by, threatening to make price swings even bigger.
Lumber futures in Chicago reached a record US$855.10 per 1,000 board feet on Tuesday, having surged more than 30 per cent since Jan. 12. This price surge during what is typically a winter lull has surprised the industry, raising homebuilding costs and forcing many buyers to purchase only their immediate needs. That may filter through to housing prices, while also boosting earnings at lumber companies such as Weyerhaeuser Co. and West Fraser Timber Co.
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Lumber defies usual lull with building boom straining supply
BLOOMBERG
Bloomberg
A customer wearing a protective mask views lumber for sale at a Home Depot Inc. store in Daly City, Calif., on Nov. 16.
Lumber prices typically hit a lull in December, but not this year as lean inventories and strong building demand force buyers to pay up.
Futures in Chicago touched a record high $845 per thousand board feet on Tuesday, Dec. 15, surpassing the previous peak reached in August. Prices have been buoyed by unexpected demand from home renovations and building as people invested in their houses during the pandemic lockdowns. Inventories remain low following second-quarter production cuts.
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