Results 1 to 18 of 18

Thread: Lumber- Unprecedented collapse

  1. #1
    Join Date
    Sep 2001
    Location
    Wateree, South Carolina
    Posts
    48,812

    Default Lumber- Unprecedented collapse

    U.S. lumber futures are trading around US$470 per thousand board feet, after reaching more than US$1,700 in May.

    Bloomberg News
    Marcy Nicholson
    Publishing date:Aug 23, 2021

    At least one mill in Western Canada has been forced to curtail production because of plunging lumber prices and soaring log costs.

    Conifex Timber Inc. said it will temporarily slow production at its sawmill in Mackenzie, British Columbia, due to an “unprecedented collapse in lumber prices.” It will curtail production for two weeks starting Aug. 23.

    North American lumber companies may have added too much production, too quickly, as demand cools and prices for the construction material plunge. After more than quadrupling in 12 months to record highs, lumber has sunk about 70 per cent since May. The crunch is particularly acute in Western Canada because of higher costs.

    Producers were swimming in cash earlier this year after rock-bottom borrowing rates during the pandemic led to a house-building boom, while locked-down homeowners spent money on do-it-yourself renovations. But DIY purchases have dropped and the lumber rally has priced out some buyers.

    Sawmills have ramped up production and announced large investments to expand capacity in the U.S. South, where timber plantations are plentiful and log prices are lower. Increased production, combined with slowing demand, caused lumber inventories to increase faster than expected.

    More mills will likely follow Conifex’s lead with additional curtailments in the near future. If not, they will need to decide how much of their first-half 2021 profits can be thrown away while awaiting higher prices, said Greg Kuta, chief executive officer of Westline Capital Strategies Inc., which specializes in lumber-trading strategies

    “The market is still over-supplied relative to demand,” Kuta said by email. “The supply-side needs to be addressed for price stability and future price appreciation.”

    U.S. lumber futures are trading around US$470 per thousand board feet, after reaching more than US$1,700 in May.

    Producers in B.C.’s key Interior region are now “underwater” with regional mill cash costs around US$525 to US$575 per thousand board feet in the second half of 2021, CIBC analyst Hamir Patel said in an Aug. 19 note. An estimated 14 per cent of North America’s lumber comes from British Columbia.

    The B.C. government could again raise its stumpage rates in October because the Canadian province’s system lags lumber prices by several months.

    Hundreds of wildfires in the province forced other producers to announce curtailments because of evacuation orders in logging areas.

    https://leaderpost.com/commodities/l...a-83233f60b10a

  2. #2
    Join Date
    Mar 2002
    Location
    Florence
    Posts
    9,026

    Default

    They got greedy
    Either write things worth reading, or do things worth writing.

  3. #3
    Join Date
    Jan 2017
    Posts
    2,152

    Default

    Did they collapse? Or did they just return to normal after unprecedented industry highs?

  4. #4
    Join Date
    Dec 2011
    Location
    Rock Hill SC
    Posts
    9,154

    Default

    Quote Originally Posted by BuckyTownsend View Post
    Did they collapse? Or did they just return to normal after unprecedented industry highs?
    That’s exactly what happened

  5. #5
    Join Date
    Nov 2014
    Posts
    13,499

    Default

    7/16 osb 3 weeks ago $44, last week $14. If there ain't enough crap in the world that pisses you off
    "They are who we thought they were"

    You can dress a fat chick up, but you cant fix stupid

  6. #6
    Join Date
    Jan 2017
    Posts
    2,152

    Default

    Buy the sheets with the blue sides. Structurally superior

  7. #7
    Join Date
    Oct 2015
    Posts
    2,265

    Default

    I'm just glad I held off on building my house. Finally predicted the future for once, but I guess Ray Charles could see it coming

  8. #8
    Join Date
    Apr 2010
    Location
    Crystal Lake
    Posts
    3,646

    Default

    I still have some of that $50 osb if anyone is looking.

  9. #9
    Join Date
    Dec 2007
    Location
    Providence
    Posts
    6,189

    Default

    I can maybe afford to build another box stand now......

  10. #10
    Join Date
    Sep 2019
    Location
    Florida/SC
    Posts
    502

    Default

    Hoping the same for vehicles in the near future... guessing it will follow since there are a lot and only waiting on chips
    Also eventually all this money injected in the economy runs out slowing demand..

  11. #11
    Join Date
    Jan 2016
    Posts
    2,773

    Default

    When the fed stops pushing $180 billion in bonds every month.....
    “Duck hunting gives a man a chance to see the loneliest places …blinds washed by a rolling surf, blue and gold autumn marshes, …a rice field in the rain, flooded pin-oak forests or any remote river delta. In duck hunting the scene is as important as the shooting.” ~ Erwin Bauer, The Duck Hunter’s Bible, 1965

  12. #12
    Join Date
    Jan 2020
    Location
    Coosa Valley
    Posts
    259

    Default

    I don't want to laugh, maybe cry, but for now I will just smile it out.
    Last edited by BullJakeGrappler; 08-26-2021 at 09:42 AM.
    Double Secret Probation Officer

  13. #13
    Join Date
    Mar 2008
    Location
    Santee Swamp
    Posts
    16,874

    Default

    Quote Originally Posted by BuckyTownsend View Post
    Did they collapse? Or did they just return to normal after unprecedented industry highs?
    And its still a cunt higher than it was..

    Same thing with gas..
    Natural Born Killer Prostaff - Killing Tomorrow's Trophies Today...

    TFC -"Be tough or get tough"

    Conservation Permit Holder #5213

  14. #14
    Join Date
    Jul 2003
    Location
    Moncks Corner
    Posts
    15,556

    Default

    I see speculators do this all the time. It used to bug me, now, I've learned to just go with the flow and appreciate the volatility and liquidity that Specs bring to the market. It'd be a boring world without them.

    One of their favorite ploys is to take a position (long or short) on a commodity. Then work with some legislators to introduce "scary" legislation that runs the market up if they're long or down if they're short. They cash out, the legislator works to get his/her bill pulled from consideration, things return to normal. Everyone seems happy,the Specs made money, and the legislator's campaign donations are up, life is good...
    Ephesians 2 : 8-9



    Charles Barkley: Nobody doesn't like meat.

  15. #15
    Join Date
    Mar 2008
    Location
    Santee Swamp
    Posts
    16,874

    Default

    In other news, steel is still higher than giraffe coochie..
    Natural Born Killer Prostaff - Killing Tomorrow's Trophies Today...

    TFC -"Be tough or get tough"

    Conservation Permit Holder #5213

  16. #16
    Join Date
    Nov 2014
    Posts
    13,499

    Default

    Quote Originally Posted by charlie horse View Post
    I still have some of that $50 osb if anyone is looking.
    #metoo
    "They are who we thought they were"

    You can dress a fat chick up, but you cant fix stupid

  17. #17
    Join Date
    Mar 2002
    Location
    Forest Acres
    Posts
    10,214

    Default

    Suppose a hurricane or two may boost em back up?
    It's not enough to simply tolerate the 2nd Amendment as an antiquated inconvenience. Caring for the 2nd Amendment means fighting to restore long lost rights.

  18. #18
    Join Date
    Jun 2010
    Location
    charleston
    Posts
    8,600

    Default

    Quote Originally Posted by PBiz View Post
    In other news, steel is still higher than giraffe coochie..
    Yep- one of my typical 20x20 hip roofs just had a 50% increase in metal roofing costs.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •