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Lumber prices above $1000 per thousand board feet since June
Posted on December 16, 2021 |
- Lumber prices grew by 5% to $1,024 per thousand board feet for the first time since June.
- In May, prices reached $1,700 per thousand board feet but later fell short by 74% and reached $452, and again regained by 127% to the current level.
- Lumber prices have been volatile since the start of Covid and in summer and spring, the cash price of lumber from sawmills soared to $1,600 per mbf from $400 mbf, driven by low production and capacity of the mill coupled with high demand from consumers to renovate their homes.
- The high price environment caused the mills to increase production, but non-essential domestic prices and curbing reforms led to a sharp drop in demand, bringing lumber prices to a modest $500 mbf.
- The price surge is also due to Canadian floods that hindered the operations of one of the biggest lumber producers, West Fraser.
- Additionally, an 18% increase in tariffs on lumber exports by the US Department of Commerce added to the price jump.
- Low mortgage rates and millennial residents who needed new homes after graduation, continued to drive home demand and raised lumber prices.