PaulGrecaud/iStock through Getty Photos
Lumber futures have fallen to ranges not seen since November, in a stark reversal from all-time highs set final yr throughout the COVID-fueled homebuilding increase.
Chicago lumber futures (LB1:COM) for July supply fell on Wednesday by the alternate most $49, or -7.5% to $604.50 per 1,000 board ft, extending this yr’s hunch to 46% and practically two-thirds under the height of $1,733 per $1,000 board ft from a few yr in the past.
ETFs: (NYSEARCA:XHB), (NASDAQ:WOOD), (CUT), (NAIL)
Probably related tickers embrace (WY), (WFG), (LPX), (PCH), (RFP), (OTCPK:CFPZF), (OTCPK:IFSPF), (OTCPK:WFSTF)
“Lumber markets are probing for a flooring,” Kevin Mason, managing director of ERA Forest Merchandise Analysis, instructed Bloomberg, citing plunging dwelling gross sales and better rates of interest, including lumber costs might fall to $400 per 1,000 board ft within the subsequent two months earlier than producers curb manufacturing to take away extra provide.
Gross sales of newly constructed properties plunged 16.6% in April from March to the bottom stage since April 2020, on the top of the COVID lockdowns within the U.S., and the most important drop in 9 years.
Lumber patrons have slowed orders and wooden is piling up at mills, that are weighing on costs, pricing service Random Lengths stated, in response to The Wall Avenue Journal.
However barring a recession, Matthew Saunders of John Burns Actual Property Consulting instructed WSJ that he doesn’t count on lumber costs to fall all the way in which again to pre-COVID ranges, which hardly ever exceeded $500 per 1,000 board ft, because of the many issues in Canada’s western forests, the place mills have struggled with fires, floods, excessive costs and hard-to-get timber.
Canfor (OTCPK:CFPZF) stated final week that its Canadian sawmills have been working at ~80% of manufacturing capability since late March, and can proceed decreased working schedules as a result of ongoing world provide chain challenges.