After four years of being the forgotten commodity, lumber is back in the spotlight, named Scotiabank’s top pick for investors for the coming year.
“The investment sentiment has changed,” said Patricia Mohr, vice-president of economics and a commodities market specialist at Scotiabank. “Of the 32 commodities in the Scotiabank commodity price index, the ones that I think will have the biggest price increases from December of this year to December of next year are lumber and oriented strand board.”
And British Columbia, with one foot in the U.S. lumber market and the other in the Chinese market, is expected to thrive as lumber’s position in the global commodities market is restored.
Both lumber and OSB are used in housing, and with the U.S. housing market making a gradual comeback, demand is expected to rise. U.S. housing starts climbed from 612,000 units in 2011 to 861,000 this year. In 2013, Scotiabank forecasts U.S. housing starts will climb to 950,000. By 2014, they are expected to hit 1.1 million.