Timber prices in the US rose to another record amid high demand, but experts expect their seasonal decline.
The cost of September wood futures in Chicago by the close of the market on Thursday was $ 939 per 1,000 board feet 36 cubic meters), exceeding the previous record recorded on September 1. The price of timber is 47% higher than the peak recorded before the coronavirus pandemic.
September futures expire on September 15, and November timber contracts are trading at $ 611.4 per 1,000 TF.
The decline in timber prices is typical for autumn, but the current contract price is about 80% higher than usual for this time of year. In the fall, demand for timber falls as people finish work on their plots and housing construction in the northern US is halted due to worsening weather.
This year, even though Americans will be less repairing roofs and fences, construction companies are stepping up activity and may peak in construction volumes since 2006, writes The Wall Street Journal. This is expected to support timber prices and the profits of logging and processing companies.
Shares of the American Weyerhaeuser Co (NYSE: WY). have more than doubled since the end of March, Canadian Interfor – tripled in price.
At the very beginning of the pandemic, logging companies cut production, fearing a drop in demand for wood due to quarantine measures in the United States. In total, the sector's production capacity declined by 40%.
The price of timber futures fell to $ 259.8 per 1,000 TF, after which it began to rise, as the pandemic triggered a wave of housing renovations and, accordingly, an increase in demand for timber.