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Lumber may fall 25%: analyst
Lumber futures may tumble as much as 25 percent from a seven-year high as output increases in Canada, the world's biggest exporter, according to Forest Economic Advisors LLC.
January 2, 2013 By Bloomberg News
The price may touch $300 per 1,000 board feet in 2013, Paul F. Jannke, a principal at the Westford, Massachusetts-based consulting company, told Bloomberg in a telephone interview. In mid-October, he correctly forecast the rally. Futures on the Chicago Mercantile Exchange on Dec. 26 reached $399.50, the highest since April 2005.
As the U.S. housing market rebounded, lumber prices this year have soared 47 percent, the most since 1993.
“We’re pretty close to the peak,” Jannke said. “The initial spike tends to be the highest, then production ramps up. If the mills increase shifts from a 40-hour week to a 50-hour week, that’s a big jump, and everybody is ratcheting up their work weeks.”
As the U.S. housing market rebounded this year, lumber prices soared 44 percent, the biggest annual gain since 1993. That topped the 24 raw materials in the Standard & Poor’s GSCI Spot Index, led by a 19 percent rally in wheat futures in Chicago.
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