US lumber prices up 29% in February

US lumber prices up 29% in February

Friday 25 Feb 2022

The price of US lumber has risen nearly 30% so far in February, in step with the wider rally in global commodities as economies around the world reopen. "I believe it's part of the larger move in commodities," David Russell, VP of market intelligence at online broker-dealer TradeStation, told Insider. "We have a kind of a broad shift of money toward commodities and materials in the broader market."

Russell said commodity prices — including those for iron, oil, soybeans, and fertilizer — have mostly pointed higher amid cold winter weather, geopolitical tensions, and supply chain disruptions. After briefly cooling off in the past weeks, lumber futures rose for the sixth straight session last week, hitting $1,204.90 per thousand board feet to its highest for the month.

That's a 29% jump from 1 February. Still, lumber is 30% below its record high of $1,711 reached in May 2021. Russell also attributed the recent jump in lumber to the US dollar's slide ahead of key data on consumer prices. When the dollar weakens, general commodity prices strengthen, giving the two an inverse relationship.

Lumber prices have skyrocketed in the past year due in part to distorted supply chains during the pandemic. For instance, shipping problems from Resolute Forest Products, one of Canada's leading producers, have put lumber supply under stress. Adding to the price pressures is an elevated focus on home building and home improvement as more Americans look to adjust to the work-from-home trend.

"Many of the same things that have caused lumber prices to rise over the last six months to a year are continuing to affect lumber prices today,"

Source: Business Insider

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