Lumber prices have tumbled 70% in the last 14 weeks following a blistering rally
Starting its ascent in late October 2020, lumber climbed to a peak of $1,711 over the course of seven months. But it took just 14 weeks to see all those gains erased.
The last 14 weeks have seen lumber swiftly give back its gains, with the latest prices – near $500 per thousand board foot – down 70% from its all-time high in May. Now, some analysts are calling a bottom while projecting flatter prices in the months ahead.
“We’re going to see a stabilization,” Mace McCain, CIO at Frost Investment Advisors, told Insider previously. “We’re out of the panic buying. We’re out of the massive industry shortages. We’re out of the extremes.”
..a recent survey of lumber brokers and manufacturers, who once hoarded the commodity, found that 49% are now facing excess inventory – another downward signal. No surveyed lumber producers reported “very tight” inventory in July.
Ed Egilinsky, managing director and head of alternative assets at Direxion, previously told Insider that he expects $500 to be lumber’s price floor..
..Between 2011 and 2019 – after the financial crisis housing bust had largely passed – the average was just $337.