Lumber futures (LB1:COM) in Chicago sank below $1,000 per 1,000 board feet for a sixth straight decline, the longest slump since January and capping the biggest weekly loss since July.
Lumber futures have dropped 28% from their early March high of $1,357 per 1,000 board feet, as new home sales fell for the second straight month in February, missing forecasts.
“The price decline is tied to the DIY [do-it-yourself] sector slowing down due to high lumber prices, with people spending their money on other things like travel,” Russ Taylor, president of Russ Taylor Global in Vancouver, told Bloomberg.
Flooding in British Columbia disrupted lumber supplies and lifted prices in late 2021, and volumes that were stuck at mills in western Canada will move more quickly in better spring weather, resulting in more supplies in the market after months of tight inventories, Taylor said.
ETFs: NYSEARCA:XHB, NASDAQ:WOOD, CUT, NYSEARCA:NAIL
Potentially relevant tickers include WY, WFG, LPX, PCH, RFP, OTCPK:CFPZF, OTCPK:IFSPF, OTCPK:WFSTF
Wood prices have been volatile since the start of COVID-19, hitting record highs as a result of a pandemic inspired building boom, then collapsing as sawmills ramped up production and high prices hurt demand.