U.S. lumber prices are getting chopped after notching seven-month highs, as the market hunkers down for a seasonal decline in construction and expected higher production next year.
But demand for U.S. boards and planks from China, Japan and the Caribbean to structure home interiors and to build shipping pallets and furniture is expected to keep the market from a deep slump.
U.S. lumber exports overseas have grown sharply, rising 22% in the first nine months of this year from the same period a year ago, to 701 million board feet. China, which accounts for 35% of the U.S.’s offshore exports, increased its purchases in the same period by 67%.
That demand helped send lumber prices to $378.30 per thousand board feet on Nov. 15, the highest value for the spot contract since April 4. On Friday, lumber for January delivery rose $3.60 to $364.80 per 1,000 board feet on the Chicago Mercantile Exchange.
But some analysts say they expect prices to decline in the near term. They are questioning whether prices are high enough to drive away customers, who can buy cheaper wood from other major producers, such as Canada.
From The Wall Street Journal: http://online.wsj.com/news/articles/SB10001424052702303332904579225073727102500