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Lumber slumps to seven-month lows as housing market bears brunt of rate hikes


PaulGrecaud/iStock via Getty Images

Lumber futures have fallen to levels not seen since November, in a stark reversal from all-time highs set last year during the COVID-fueled homebuilding boom.

Chicago lumber futures (LB1:COM) for July delivery fell on

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Comments (32)

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Charles M. profile picture
People complain here about the retail cost not coming down and say they are putting off projects until it does. Seems like demand is still there, why should retail stores lower their prices?
Think about it. The ones who are going to hurt are the manufacturers. HD will do good, WY and others will drop
@Charles M.
WY is an eternal business, it will never make much money but will never go broke. 😂
Charles M. profile picture
@robinbreak true since it switched to being a REIT, but for investors that means no profits no dividends
Stefan Redlich profile picture
Meaningless. Retail/Wholesale prices are still sky-high
@Stefan Redlich Like gas prices, it takes time for the prices to come down. Home Depot doesn't want to sell their lumber at a loss.
Lumber prices were purposely inflated. The excuse was production was stopped due to Covid and it never recovered. Sure…. Just like oil where there is an abundance when just 2 years ago they were all going bankrupt.

Now with Chinas lockdown due to Covid there are supply constraints in every single field which will take atleast 9-12 months to get back to normal.

Hopefully lumber prices never get manipulated back to these insane prices.
@notre $600 per 1000 board feet is still quite expensive compared to the $300 pre-covid levels, and I have the feeling that the $500 mark is the new bottom for lumber prices for the next decade (just like the $200 mark was the bottom for the past couple of decades).
Timothy Stabosz profile picture
That’s a bold prediction. I think it’s more likely housing hits a wall, and with the pent up projects long gone as well, we will see $300-350 at the bottom on the cycle in the next 6-18 months. Longer term, $400-500 may be the new norm, if the input costs stay high (especially).

What is the basis for your prediction?
This should be positive for inflation.

Recession seems to be already here.

Fed might pause raising interest rates earlier than people think which should be bullish for stocks/ risk assets.
John Silcox profile picture

Some metals prices appear to be rolling over as well, like nickel and copper. Cooling off inflation starts with the basics.
Charles M. profile picture
@John Silcox Lead as well. Problem is all the producers and distributors of commodities are sitting on higher cost inventory. They have to work through this. The companies who ran lean inventory will come out best although that was about impossible with supply chain disruptions. Companies stocked up when they could due to demand.
People mention costs haven't come down or been passed onto the retail end. Would you sell at a loss or try to keep margin as high as possible for as long as possible?
Only way costs are going down is if demand stays down or competition kicks in. I don't plan on lowing my costs unless I lose sales, then I know others are lowering their prices.
BTY, this goes for gold and silver. Two years ago their prices were down but try buying at that time and Kitco and JM were saying no stock. They really meant they didn't want to sell coins and bars at a loss on inventory they had paid a higher cost on
I’m a remodeler - recently had to replace (6) 2x8x12’ floor joist and (5) 3/4x4’x8’ OSB T&G subfloor on a job - $500 just for the material. Pre pandemic same material would have cost $250
@NebHusker okay but what was that same piece 1 year ago?
@SantosHelper 1 yr ago 7/16” 4’x8’ OSB sheeting was around $13/sheet - today it’s $36-42/ sheet. 2 x 4 x8’ was $2.85-$3.25 @ now they are$6.50-$8
Victor Justice profile picture
Lumber is just taking a breather. Hopefully $1,500 by end of the summer.
Turk Malloy profile picture
@Victor Justice Why would u hope for lumber to back up ? Do u wish for high oil prices too ?
@Turk Malloy
lumberjacks tradespeople and sawmills companies hope for high lumber prices. If you ask me, those are dangerous jobs and risky businesses that fully deserve the money they're making.
The same can be said for metal prices and mining businesses.
Turk Malloy profile picture
@robinbreak Ok so with this logic guys who work on the oil rigs hope for higher prices so they can make more. Yeah I don't think so. Just like it costs to fill up your tank with higher oil prices. Higher lumber prices mean anything made with wood is more expensive. Between these 2- this hits EVERYONES wallet.

What they hope for is stable pricing. Stable pricing means the companies that produce oil, gas, lumber, houses, etc can provide better forecast input costs into the future. Thereby being able to provide stable employment. High commodity prices hurt everyone - except for those who are investing in them. But one should not hope for high commodity prices as unless you are a big time trader - you feel the pain in costs of any finished goods.
So when can we expect lumber prices at the lumber yards to go down ?
thumb.ai profile picture
@NebHusker Up like a rocket, down like a feather?
BuckingTrends profile picture
@thumbsoup That's what she....
Exactly. I’ve been wanting to build myself a house and been waiting for material prices to drop
@Mountain Walker I just want to rebuild my stairs. 3 step stringers were $45 each last year, so I'd have been $150 in just for those ... ! On a small project! Maybe finally do it this year :)

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