Wood prices in the United States doubled in three months to a record high
Release date: 2021-02-20 14:54 Source: unknown Author: admin Click:
Timber prices are soaring in the United States, which could further drive up housing prices.
According to random length timber futures in March, wood prices rose slightly above $1000 per 1000 board feet on Thursday morning, reaching a high of $1004.90 in the session, doubling the price three months ago to a record high.
Board foot is a professional unit of measurement for wood in the United States and Canada. One board foot is the volume of wood one foot long, one foot wide and one inch thick.
In January, new housing starts fell in the United States, possibly due to higher wood costs. According to statistics, the number of single family housing starts in the United States fell 12% in January from December.
Robert Dietz, chief economist of the National Association of home builders, said: "builders have expressed concerns about increased timber and other construction costs, as well as delays in obtaining building materials. With existing housing stocks still low, rising interest rates will also erode housing affordability in 2021. "
Dietz also pointed out that the number of single family houses allowed but not started increased by 9.6% in December, up 28% from the same period last year, due to increased costs of building materials and delays in obtaining materials.
Executives at major U.S. builders said on the earnings call that they had slowed production in the hope of waiting for raw material costs to fall. Unfortunately, however, costs do not seem to have fallen.
Joe Sanderson, managing director of natural resources at domain timber advisors, pointed out that the following factors may drive down wood prices in the near future:
In December, the US tariff on Canadian timber fell from 20% to 9%, which made Canadian timber cheaper and exported more timber to the United States; La Nina causes dry weather throughout the southern United States. In winter, it is drier than normal, which leads to the increase of cutting volume and the increase of timber supply; In recent months, new mills have been launched.
He added that with strong demand, wood producers tried to lock in production and returns in the first quarter. As a result, they are produced at higher capacity than normal. This could lead to oversupply.