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Lumber, plywood prices skyrocket
New York Times via Houston Chronicle ^ | May 1, 2004 | BERNARD SIMON

Posted on 05/05/2004 4:30:23 PM PDT by snopercod

TORONTO — Lumber and plywood prices have shot up so rapidly in recent months that they are tearing the profit out of home construction for some builders and threatening to dent the booming housing market.

Paul Kuszmaul, president of Kuszmaul Builders in Champion, Ohio, said the run-up in prices had left him unsure whether to push ahead with a condominium development in the Mahoning Valley, between Pittsburgh and Cleveland.

Since January, he said, the cost to build each condo unit in the project had risen $4,000, largely because the price has more than doubled for oriented-strand board, a widely used substitute for plywood made by pressing long wood strips together using adhesives.

The product has been rapidly displacing plywood as a construction material because it is cheaper to make, can be made from the limbs and roots of trees as well as trunks, and is more uniform in quality. Almost three-fifths of all structural wood panels now sold are oriented-strand board, or OSB, compared with a quarter in the early 1990s.

Prices of both OSB and plywood reached records one week last month. According to Random Lengths, a trade publication, 1,000 square feet of -inch OSB sells for $503 in the north-central United States; this time last year, the same amount cost $170. Half-inch four-ply southern pine plywood is up to $523 for 1,000 square feet, from $240 a year ago.

Plywood prices began to rise last year in late May and early June, dropping late in the year, before increasing sharply in January.

Prices of other types of lumber have also risen, although less sharply. And the buoyant metals markets, especially for steel, have also driven up costs.

"It's almost a rocket ship ride," said Jim Enright, general sales manager at Rosboro Lumber, a plywood manufacturer in Springfield, Ore. "The activity level since the beginning of the year has been phenomenal."

The ride has been less exhilarating for buyers. Brian Catalde, president of Paragon Communities, a builder in Playa del Rey, Calif., said that the cost of the lumber used in building a typical entry-level home had roughly doubled in 18 months, to $24,000.

A handful of manufacturers dominate the OSB market. Five companies account for three-quarters of all sales in North America. They are Louisiana Pacific, Weyerhaeuser and Georgia-Pacific in the United States, and Nexfor and Grant Forest Products in Canada.

One reason for the price surge is that production of the boards has not grown fast enough to make up for the loss of plywood, because of the closing of older plants.


TOPICS: Business/Economy; Extended News
KEYWORDS: construction; inflation; lumber; tariffs; treehuggers
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I bought some things for a project at the lumber store today and am still in shock. Since this article was written, plywood prices have jumped 20% in less than a week.
1 posted on 05/05/2004 4:30:23 PM PDT by snopercod
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To: snopercod
Another happy byproduct of the environmental / ecoterror movements.
2 posted on 05/05/2004 4:32:26 PM PDT by Joe 6-pack ("We deal in hard calibers and hot lead." - Roland Deschaines)
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To: The G Man; Brian S; wjcsux; Eric in the Ozarks
bump
3 posted on 05/05/2004 4:32:47 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: snopercod
Gosh...between lumber, gas and milk prices....we are in for a fun summer!
4 posted on 05/05/2004 4:32:52 PM PDT by BossLady (What do your choices cost you????)
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To: Joe 6-pack
Another happy byproduct of the environmental / ecoterror movements.

This cannot be said often enough.

5 posted on 05/05/2004 4:34:08 PM PDT by thackney (Life is Fragile, Handle with Prayer)
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To: Joe 6-pack
The guy at the lumber store said, "All the plywood is being sent to China and Iraq".

Yeah...I know...

6 posted on 05/05/2004 4:34:20 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: BossLady
Don't forget steel and copper.

Thank G-d beer is still reasonable.

7 posted on 05/05/2004 4:35:30 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: snopercod
Iraq reconstruction builds plywood demand, prices

By Gary Strauss, USA TODAY

Posted 9/1/2003 10:51 PM

A government order for plywood panels destined for Iraq is pushing key wood products prices to all-time highs. The Defense Logistics Agency, the military's prime supplier, is buying more than 20 million feet of plywood sheeting, most for U.S. forces' base camps, guard posts and other projects, spokeswoman Dawn Dearden says.

The $13.3 million purchase is relatively tiny — about 300 million feet of plywood sheeting is sold monthly. But in an industry facing surging demand, the deal — and rumors that more lumber is headed for Iraqi reconstruction efforts — is fueling an already overheated market, says Shawn Church of Random Lengths, an industry newsletter that charts prices.

The price of 7/16-inch oriented strand board (OSB), a plywood composite common in new homes, low-rise apartments and commercial structures, hit $415 per 1,000 square feet Friday, eclipsing a $355 high in 1999. Pricing on 15/32-inch plywood sheets jumped to $470, also eclipsing 1999 highs.
8 posted on 05/05/2004 4:39:30 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: snopercod
Dang.....steel and copper are on the list as well?!

Mountain Dew is still reasonable too.....whew!

9 posted on 05/05/2004 4:39:33 PM PDT by BossLady (What do your choices cost you????)
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To: snopercod
I quit beer over a decade ago when the price of anything but canned horsep*$$ got too high. I don't see how we will be able to afford anything, wood, steel, or beer much longer.
10 posted on 05/05/2004 4:40:58 PM PDT by RightWhale (Destroy the dark; restore the light)
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To: BossLady
Pssst.... What ever you do, don't say the "I" word. Chairman Greenspan says there is no evidence for "it."
11 posted on 05/05/2004 4:41:06 PM PDT by Misterioso (This is a duplicate post from the other thread.)
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To: BossLady
Reinforcing rods and welded wire mesh used in concrete slabs are up 300% since last year.
12 posted on 05/05/2004 4:41:32 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: snopercod
Have you bought any steel lately. Yikes! Waaaaaaaaay UP!
13 posted on 05/05/2004 4:42:08 PM PDT by BJungNan
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To: snopercod
We have the misfortune of beginning to build our new home now...

We expect to break ground next week.

The estimate for plywood and dimensional lumber was over $95k for the project and that was a week or so ago...

We've been working and saving for 11 years to build on our property and now the prices are souring out of control. I don't know what's going to happen. I expect many sleepless nights...
14 posted on 05/05/2004 4:42:44 PM PDT by DB ()
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To: snopercod
That is outrageous! I had no idea! What gives? Are you in the construction biz?
15 posted on 05/05/2004 4:43:06 PM PDT by BossLady (What do your choices cost you????)
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To: snopercod
I just called my supplier...here are his latest quotes on CDX and OSB

1/2 8' OSB 1689.60 per unit / 51.80 sheet / 1.60 sq ft
1/2 8' CDX 1584.00 per unit / 48.00 sheet / 1.50 sq ft

All I can say is thats absurd.

Quotes are from Golden State Lumber, San Rafael, and subject to change.
16 posted on 05/05/2004 4:43:09 PM PDT by antaresequity
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To: Misterioso
Tagline removal bump. (g)
17 posted on 05/05/2004 4:43:41 PM PDT by Misterioso
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To: snopercod
Reinforcing rods and welded wire mesh used in concrete slabs are up 300% since last year.

Bush steel tariffs largely to blame here. American prouction capability is not up to speed....and even if it was, it is more expensive.

18 posted on 05/05/2004 4:44:36 PM PDT by antaresequity
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To: snopercod
I just filled the gas tank for $2.20 a gallon. Think I might swing by the gravel yard and get a couple sacks of cement. It wasn't bad last year. Maybe I'll use straw for reinforcement if I can figure out how to keep it from floating to the top. If cement is too high, I'll try sun-dried mud bricks. Of course, we don't get much sun.
19 posted on 05/05/2004 4:45:28 PM PDT by RightWhale (Destroy the dark; restore the light)
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To: antaresequity
$48 a sheet for 1/2" CDX?!?!?! Holy Shiite!
20 posted on 05/05/2004 4:45:29 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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