U.S. lumber prices have firmed in recent months as rising housing starts have put pressure on lean inventories, creating a supply shortage that has yet to fully unwind, executives and industry experts told MNI.
Some further gains can be expected in 2014 as the housing recovery strengthens although the growth in single- and multi-family starts is expected to be modest by pre-recession standards, pointing to commensurate gains for lumber prices.
But most lumber industry executives said any further price gains likely would be in line with an anticipated incremental rise in housing starts, which are expected to rise to a seasonally adjusted 1.15 million rate in 2014 from 924,000 this year, according to the National Association of Home Builders.
“We expect demand to be roughly the same in 2014,” said Mark Pawlicki, a spokesman for Sierra Pacific Industries, the second-largest U.S. lumber producer, based in Anderson, California. “We’re looking for no major bump in the graph.”
The Random Lengths Framing Lumber Composite Price, an industry benchmark that is a weighted average of 15 grades of lumber, rose to $396 per thousand board feet in the week to Nov. 8 from $389 a week earlier, and $347 a year ago, according to the publication. Recent price gains were helped by mild weather throughout much of the United States, boosting construction industry demand.