Lumber slumps to four-month lows as inflation hits DIY renovation market

Stack of wood planks isolated on white

adventtr/iStock via Getty Images

Lumber futures (LB1:COM) fell as much as 8.4% to $870 per 1,000 board feet in Chicago on Monday, hovering near four-month lows and extending a slump to 30% since early March.


Potentially relevant tickers include (WY), (WFG), (LPX), (PCH), (RFP), (OTCPK:CFPZF), (OTCPK:IFSPF), (OTCPK:WFSTF)

Soaring inflation is curbing the appeal of do-it-yourself renovators to take on costly new home improvement projects, market consultant Russ Taylor told Bloomberg, noting the DIY sector is the largest lumber market segment, accounting for ~40% of consumption.

Inventory is piling up because of transportation snarls that have left many of North America's top producers with stockpiles at sawmills, and with a lack of railcars and damaged roads, "producers are sitting on a lot of inventory because they can't ship the stuff," BMO's Mark Wilde said.

The backlog is especially serious in western Canada, where some lumber companies including West Fraser and Canfor have cut back on operations.

Wood prices have been volatile since the start of COVID-19, hitting record highs as a result of a pandemic inspired building boom, then collapsing as sawmills ramped up production and high prices hurt demand.

Recommended For You

Comments (39)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.