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Thread: Lumber

  1. #1

    Default Lumber

    Like Copper, lumber continues to make a big move higher. Strong economic indicator, or are we running out of trees?

    Tom
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  3. #2

    Join Date
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    Default Re: Lumber

    That could be a good sign for housing, and the economy in general...

    "The movements of lumber futures prices tend to lead corresponding movements in the PHLX Housing Sector Index (HGX), but with a lag time of about 55 trading days."

    https://www.mcoscillator.com/learnin...its_mojo_back/

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  5. #3

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    Default Re: Lumber

    Not sure if we are running out of trees, but we are definitely running out of lumber. My last trip to Home Depot (just a week ago) and there wasn't a single piece of pressure treated lumber in the entire store. I have heard lots of people are using this down time for home improvement projects, but come on no pressure treated lumber to be found. And the worst part, the folks working at Home Depot had no idea when they would get the next shipment.

    So it is not surprising that lumber continues to move higher...
    I pride myself on the fact that I will never have a cheesy "uplifting" quote in my signature block...Ever!

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  7. #4

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    Default Re: Lumber

    I have two family members in the construction business and they told me that they are swamped this summer.

    A few things:

    1. Those summer trips were cancelled resulting in more $$ in pockets + stimulus checks. Jobs really started coming in after those checks came.
    2. Being home all day people wish they had that deck or pool in their backyard to sit in while chillin' or working (also chillin').
    3. Those projects that had been put on hold - those windows that are drafty or don't open so well anymore - being home all day some people just can't stand dealing with it anymore.

    I remember two years ago when there were the fires out west and Puerto Rico got wiped out analysts were calling for higher lumber prices going forward. It's possible supply was low in the first place, and logistical disruptions made things worse.

    Plywood and pressure treated wood was also used by concerned business owners to board up their shops in big cities during the peaceful protests. I don't blame them. Shutdowns were really in full force then so the shelves were wiped out.

    One more thing, slightly related. Both of their businesses took out the loan even though they it turns out they won't need it. Nobody knows the details behind it because the terms seem to change every day, but as it stands now, it's basically a HELOC from the Fed that may be used to expand their businesses for next year. Right now, almost all the jobs are pushed out to May 2021.

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