Lumber Prices Approaching Four-Year Highs

Dennis Gartman points out that lumber prices are rising in his newsletter today. The chart below (NAHB data here) shows that lumber prices are indeed rising, and are approaching four-year highs. CME lumber futures prices have doubled since early 2009, and random length lumber prices have increased by 80%. Here’s one explanation from Reuters:

“Industry analysts have said that while the higher prices are encouraging, they likely reflect reduced production capacity rather than significant increased demand for the wood used largely in housing construction. Sawmills across Canada and the United States have cut production or shutdown completely over the past three years because of the U.S. housing market collapse.”

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About Mark J. Perry 262 Articles

Affiliation: University of Michigan

Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.

He holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University in Washington, D.C. and an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota.

Since 1997, Professor Perry has been a member of the Board of Scholars for the Mackinac Center for Public Policy, a nonpartisan research and public policy institute in Michigan.

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