Lumber prices boosted by Sandy damage
Lumber prices have surged to a 19-month high after this week's devastating storm Sandy spurred forecasts of a spike in demand for construction material, providing a lift to Canadian producers already benefiting from surprising strength in the forestry sector.
The benchmark futures contract for January delivery of lumber closed at $331.20 (U.S.) for 1,000 board feet on the Chicago Mercantile Exchange on Wednesday, up by the maximum $10 daily limit as traders focused on the need to rebuild thousands of homes destroyed or severely damaged by Sandy.
“Lumber prices are atypically high for this point in the year, and bucking a seasonal trend already,” Daryl Swetlishoff, a forest products analyst at Raymond James Ltd. told The Globe and Mail. “For the near term, even if the hurricane is partially a psychological impact on lumber, prices are going to be buoyant.”
Months before Sandy blew in, Canadian lumber companies were thriving amid robust demand from the rebounding U.S. housing market and strong exports to China.
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