- Lumber prices see first price decline in 18 weeks
- This drop comes on top of -30% drop in lumber futures
Months-Long Lumber Demand May Be Ebbing
It’s summer time. Vaccinated Americans are beginning to take vacations again instead of focusing on their dreams of a newly built home or adding a new room to their existing homes.
The result? Sawmills are beginning to catch up with ravenous home building demand
All of that boils down to Americans shifting their spending priorities away from home renovations and home building projects that have been driving sky-high lumber price increases and stark material shortages in the home building industry.
According to Josh Goodman, vice president of purchasing for Sherwood Lumber Co.in New York, “We’re seeing demand slow down and more supply coming to the marketplace…we’re definitely buying less.”
Lumber Prices Decreasing
Random Lengths, a trade publication, quoted CIBC (a commercial, wealth management, personal and small business banking service) analyst Hamir Patel’s article titled “Lumber Pricing Decline Now Clearly Underway.”
The price of Western spruce-pine dropped -1.8% to $1,600/1,000 board feet.
Southern yellow pine 2 X 4s dropped -5.8%.
Random Lengths Composite dropped -1% below a record high.
Lumber futures on the Chicago Mercantile Exchange are set for a monthly decline in June after lumber prices hit record highs in May.
Wholesalers Reducing Lumber Amounts
For now anyway, lumber wholesalers who supply lumberyards with lumber are buying less of high-priced lumber in hopes that lumber demand will continue declining.
Sherwood Lumber’s Goodman said, “There’s no more crazy panic (for lumber) in the streets. But, this could all change very quickly.
Thanks to Bloomberg, CIDC, and Random Lengths.