Posted on 06/05/2021 7:25:42 AM PDT by blam
Lumber futures on Chicago Mercantile Exchange fell -3.1% to $1,284.20 per 1,000 board feet, extending last week’s first loss since January. For the last 18 trading sessions, lumber prices have come under pressure amid signs that an unprecedented rally may be waning.
Citing data from trade publication Random Lengths, CIBC analyst Hamir Patel told Bloomberg that Western spruce-pine-fir prices decreased $130, or -8.1%, compared to last week’s $1,470 per 1,000 board feet, and Southern yellow pine 2×4 lumber dropped $92, or -6.9%, to $1,236 per 1,000 board feet.
The decline comes alongside a drop in lumber futures, which have tumbled into a bear market, -25%, in recent weeks, from an all-time high reached earlier in May of around $1,711 per 1,000 board feet.
This suggests that sawmills could be catching up amid the flurry of demand from North American homebuilders, along with supply chain issues, which created massive supply constraints, which propelled lumber prices to record highs.
“Record softwood lumber prices amid an acute supply shortage appear unsustainable and may correct sharply from a level that’s quadruple the 10-year average,” Bloomberg analyst Joshua Zaret wrote this week.
But with lumber prices adding tens of thousands of dollars to new residential builds, some builders have paused or halted new construction.
Rep. Bob Gibbs, R-Ohio, who serves on the House Oversight Committee’s environment subcommittee, told FOX Business that increasing lumber prices are “just one of the many indicators that President Biden is failing American workers.”
“Lumber prices are an issue that has many causes, from economic complications from the coronavirus pandemic to difficult trade issues with Canada. Biden has shown he is either unwilling or incapable of tackling these obstacles,” Gibbs told FOX Business.
Last week, Patel told Bloomberg that even though home renovations are easing, lumber prices could maintain around the $1,000 handle through 2021.
Despite the latest pullback, prices are likely to remain elevated until the Federal Reserve begins...
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Supply and demand. It’s a beautiful thing when allowed to work. I wish people understood that when they want so-called price gouging laws.
But is the demand, or rising lack of it, due to the current high prices? I think so.
It can’t. I haven’t sold my house for three times what it’s worth yet.
So far not in Californicator at Home Depot and our local lumber yard.
We are in the process of having the outside of our home repainted and siding replaced if necessary.
Our contractor bought some 4X8 outdoor plywood a little over a week ago for our job. On Thursday he picked up another panel for us and some for a neighbor needing repair. In a week the price for a panel had gone up another $ at both stores.
Prices are still ridiculous. They’ve still got quite a bit to come down.
It doesn't work so well when your supplier base and customers are entirely different, as in the plant where I manage these things. We've gotten though the pallet crisis by (a)shifting our business to a rural mill which uses a lot of Amish (the real kind) labor to build pallets as they are a demographic loathe to sit on their butts and collect enhanced unemployment benefits and (b)using every odd size pallet which comes in from customers to ship to suppliers even if the size is not ideal.
Granted, this is only one small piece of the lumber shortage, but it is interesting all the same.
A lot of the hardware stores in our area won’t even post prices due to the wild fluctuations.
We just built a house and signed the papers with our builder in March 2020. Couple months later he told us if we hadn’t signed when we did, it would have been another $30-40k!!
Concrete companies are adding an $80 premium if they roll a truck with less than 5 yards of cement.
Yes, and that will make prices go down. Some commercial construction started using steel instead, and I know many people who have put off projects that require wood until prices decline.
I don’t want price gouging laws, but this was not supply and demand. They were intentionally not shipping to drive up prices artificially.
Rail cars were pouring in from Canada and then the products would just sit in the stock yards with nobody trucking them out.
Intentionally withheld. It’s all tied together with everything else going on though.
I have a friend up here who is a roofer. He needed to repair around a skylight, and needed a sheet of OSB and some 2x4s. He paid $485 for one sheet of OSB and 5 2x4s. My jaw almost hit the floor upon hearing him tell me that.
I really don’t understand how builders are still building homes here. The prices will have to be extremely high to recoup the costs and make anything, well inflated over what is even realistic. I suppose the entire real estate market all over is mostly unrealistic now anyways.
But reductions? Good luck.
I have no clue if this mean supply is finally ramping up easing the lumber shortage, of if this means home construction has softened, reducing demand for lumber. Maybe I should have read the article before I posted this. Maybe they explain it.
He paid $485 for one sheet of OSB and 5 2x4s.
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Friend working HVAC at a VERY muddy site in south Texas had to lay wood across the worst parts to get equipment and tools into and out of the building he was installing on. He laid about $350 worth of lumber out to do it.
Nope, the article does not speculate on the cause for falling lumber prices. It could be as simple as stupidity by people pushing lumber into a bubble and then sanity quicky returning to the market, so lumber is finding its genuine high-demand price.
I don’t know.
Been seeing these numbers everywhere. High lumber prices are, wait for it...transitory!
Like all the higher prices we are seeing, except for oil.
With Biden and OPEC in agreement that higher oil prices are desirable (to them) we will see higher oil prices longer than we will see other high prices.
The future market was originally designed to stabilize prices with hedgers and speculators.
TELL ME HOW MANY HEDGERS ARE IN THE MARKET!
“A lot of the hardware stores in our area won’t even post prices due to the wild fluctuations.”
Our 2 stores tell the contractor the price when he is in the store’s office, and he gets that price if he orders and pay via credit card then.
We had about 4 out of town wood/lumber suppliers. Now with the new fuel prices, they don’t deliver here. We can remember seeing a big concrete/cement truck in the neighborhood. They are on our streets repairing them.
In the late summer/early fall of 2018 we had our old redwood deck replace at what we thought was astronomical. Then, a few months later he replaced the redwood at our front door, about 1/5 of the size of the back deck and the wood cost was off the wall.
This guy was the best deck builder/replacer in this area, and he got out of the decking business shortly before the pandemic. He is now in the door and window business and the prices are a little more stable. After he replaced our front door deck, my wife decided she wanted a new front door. He told her to have it stripped and repainted for about $500. She told him that was too high. He told her to go to Home Depot and price a solid mahogany door.
First of all they didn’t have a solid mahogany door and a $1,000 might get a cheap door. So, we now have a refinished/stained good looking solid wood door.
“I don’t know.”
This is the first step to understanding something, good for you.
Most here just make up bedtime stories and boogie men to make themselves feel better about what they don’t know and blame others for their problems like liberals prefer to do.
That would hurt to just lay it in the mud, but I suppose we use rig mags for the same thing up here, and they aren’t cheap either.
I had a few things I wanted to do this summer, but I’ll hold off most likely.
My 100 yard target has OSB backing that I staple my targets to, and everyone that’s been over thinks I’m just flaunting money.
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