US lumber prices drop for 9th straight week

Friday 16 Jul 2021

Prices for lumber in the US suffered another weekly loss and descended to levels not seen in roughly six months as the market contends with signs of softening demand and easing shortages. Lumber prices on Friday fell about 4% to trade at $689 per thousand board feet. That move brought lumber below $700 for the first time since mid-January.

Prices have tumbled by roughly 60% since their peak of $1,670 per thousand board feet on May 7. One potential factor in pushing lumber lower is consumers allocating funds to businesses such as those specializing in hospitality and travel as more Americans get vaccinated against COVID-19. About 48% of the population has been fully vaccinated, according to the Centers for Disease Control and Prevention.

"Our recent research … suggests a combination of high housing and wood product prices and the shift of expenditures to services in the reopening (from do-it-yourself [DIY] home projects) has negatively impacted new and repair/remodel construction expenditures," wrote Bank of America analysts on Friday.

Meanwhile, dealers and builders are likely decelerating purchases leading up to a slowdown in construction that's typical in summer months, they said. "This is especially true given long lead times - the concern being that today's order of lumber shows up at the beginning of August just as prices move down at an even stronger pace."

Signs of easing in lumber shortages have also fostered the pullback in prices. Sawmills have reportedly ramped up output after the pandemic prompted producers to stop work. Lumber prices leapt to nearly $1,700 this year in part on a surge in demand for the building material as people stuck at home by the pandemic took up home improvement projects.

Source: Business Insider

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