Lumber prices have hit a nine-month low as sawmills ramp up production and demand from home builders weakens.
September lumber futures in Chicago have fallen as much as 4.4% to $482.90 U.S. per thousand board feet, the lowest level for a most-active contract since October 30th of last year. Prices have now dropped more than 70% from the record highs seen just three months ago.
The decline marks a stark reversal for lumber after strong U.S. construction demand during the pandemic spurred a surge in orders for the building material, causing prices to more than quadruple to their May peak and fueling inflation concerns.
However, sawmills have since increased output, and a shortage of other building supplies such as siding and windows has slowed the pace of construction.
The drop-off in lumber prices has been highlighted by the U.S. Federal Reserve to reassure markets that a surge in inflation will be temporary.
Even the wildfires currently raging in British Columbia, which have forced some sawmills to curtail production, haven’t managed to stem the slide in lumber prices.
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