Lumber prices are slightly up. Sawmills with timber supply of species such as SY pine lumber, hemlock, and Douglas fir may find that markets are improving. Hardwoods and reclaimed lumber also appear firm as the suppliers search to fill green building demand. On May 21, 2012, lumber price futures for July were listed at $287.90, which is slightly down from the previous price. Sawmills still have excess capacity as housing starts inch up. In March privately-owned housing starts were 654,000 units seasonally adjusted. This was about 5.8 percent below the
revised February estimate of 694,000. The March rate for multi-family (buildings with 5 or more units) was 178,000. Housing starts are important because they drive demand for lumber, but also hardwood furniture, fencing, decking, flooring, and other products. However, in the same month, there were approximately 200,000 new foreclosed homes, which adds more
inventory to the market. In addition to housing starts, another important factor is foreclosures. There is still a large inventory of foreclosed homes on the market. Even though the foreclosed homes are selling, more are coming on the market. The number of foreclosed homes sold was 75,558 and this was 6.2 percent higher than February 2012 (Realtytrac 2012). At first glance this appears to be good for lumber demand because foreclosures are
being sold and taken of the market. However, during the same month,there were 198,853 new foreclosures and this was a 5.1 percent decrease over
March 2012. Therefore, even though the housing start figure is higher than the previous year, foreclosures are still adding to the supply of unsold homes on the market. Another key to the puzzle of timber and lumber prices is exports. The log and timber (hs code 4403) export category is down as of March 2012. Overall, log and timber exports are down 10.6 percent over the previous year. In contrast, lumber exports are up 1.5 percent as of March 2012 over the previous year. China log and lumber exports are both down, with lumber down 8.4 percent and log and timber are down 22 percent. The ability of China to absorb U.S. timber and log and lumber supply appears to be weakening. So where is the market headed? The near future is still nebulous, but it appears the industry will still crawl along the bottom for the next few months. While housing starts are slightly up, there are still new foreclosures coming on the market. The number of foreclosures is still keeping a lid on the demand for new housing. Furthermore, demand for lumber and timber in China appears to be slowing down and this is pulling overall global demand down. In summary, keep you belts tightened for the next few months.
Stick Trade Blog
Lumber
Posted May 21st, 2012<< Back to Stick Trade
Lumber News from Around the Web
- Family Outings: At Arcola Mills, learn about lumber days, soak up some nature - Pioneer Press May 19, 2013Family Outings: At Arcola Mills, learn about lumber days, soak up some naturePioneer PressI had taken my 7-year-old on a morning excursion to visit Arcola Mills, a graceful 19th-century mansion a few miles north of Stillwater that provides both a retreat to nature and a glimpse into the era of the St. Croix Valley's lumber boom. This summer ... […]
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- Local Flooring Business Part of a National Campaign - Patch.com May 18, 2013Local Flooring Business Part of a National CampaignPatch.comAccording to Vice President of Marketing & Advertising Frank Chiera, “The Where Friends Send Friends mobile tour creates excitement and a level of engagement with the brand and our customers that is truly unique in the flooring industry. We can't wait ... […]
- Back to the Futures: Soybeans shoot higher, precious metals soften and lumber ... - The Gazette: Eastern Iowa Breaking News and Headlines (blog) May 17, 2013The Gazette: Eastern Iowa Breaking News and Headlines (blog)Back to the Futures: Soybeans shoot higher, precious metals soften and lumber ...The Gazette: Eastern Iowa Breaking News and Headlines (blog)Cold, wet weather in the US this spring slowed down construction, diminishing short-term demand for lumber. A report released Thursday showed that housing star […]
- Timber! Watch Out for Falling Lumber Prices - Minyanville.com May 17, 2013Timber! Watch Out for Falling Lumber PricesMinyanville.comAnother leading indicator, lumber, is known as the barometer for the housing market. When lumber prices are in an uptrend, typically so are housing builds, home prices, etc. Lumber prices have been very strong over the last five years, having turned up ...and more » […]
- The Hot New Thing To Worry About Is Lumber Futures - Business Insider May 17, 2013The Hot New Thing To Worry About Is Lumber FuturesBusiness InsiderLumber prices and the Homebuilding Stocks have a pretty high correlation for obvious reasons. They generally move higher together, and lower together, over longer periods of time. When they start diverging, however, we should probably take notice ...and more » […]
- The hottest trends in wood flooring - Chicago Tribune May 17, 2013Chicago TribuneThe hottest trends in wood flooringChicago TribuneKristy Kitzmiller had three requirements of the flooring for her new beachfront home in New Buffalo, Mich. It must be beautiful, environmentally friendly and able to withstand sandy feet from her human and canine visitors. Her choice: wide-plank (6- to ... […]
