Lumber is up because of INCREASED demand and an inelastic supply. There have been supply disruptions ever since covid. For example, I had a sawmill in WA state shut down in January for 2 weeks due to covid.
Since November, there have been supply and transportation problems throughout North America.
It started with the floods in BC in November. This shut down sawmills and disrupted the transportation on both roads and railroads out of BC.
Then when that got cleaned up, we had the Christmas holidays and some major snow storms that backed up shipments.
When that was over, we had the Vax mandate for truckers to cross the border. In addition, the BNSF railroad workers seem to be slowing down shipments on purpose. Then just this past week, the Teamsters Union voted to strike the CPRS railroad.
Lastly, there is some lumber and plywood that comes from RUSSIA. As of yesterday, there was ONE remaining VESSEL line that was willing to pick up freight in St Petersburg, Russia.
All of these factors have had caused restrictions on the supply side of lumber throughout the world.
The other side is DEMAND is up across the world.
The supply of homes available for sale in the US is down 31% on average in the USA. So, there are less homes available for the buyers to purchase.
There is still a major exodus from the liberal cities to the suburbs and country. People are still leaving NY, NJ, CT, CA and moving to NH, SC, FL, ID, WA, AZ and TEXAS.
Home building companies in the states people want to move to are affected by labor shortages too. There are only so many roofers, framers, concrete contractors, etc available to build a new house.
European and Asian countries that were locked down are increasing demand too for lumber. Japan is buying and building again. Great Briton is done with Brexit. OPEC countries in the middle east are doing pretty well again now that oil is $100/barrel.
So, Demand is UP, Supply has not been able to increase to meet demand yet. Eventually, the mills will be able to ramp up production. They always have in the past. Until they can, prices will remain high.
The Lumber Broker
Thank you for that post. Helps me understand the situation.
Timber- Let it all burn. That is the California way.
LP in the UP is changing it mill in Sagola over to siding.
They changed the building code around here to allow for 7/16 sheeting instead of the minimum of 1/2 for roofing.
Word is that Potlatch at Sawyer is going full bore. The boys up that way are reducing production in the woods because of costs. Cant afford it.
My brother has been trying to get a home finished in WA state for over a year. He can NOT get blown in insulation for ceiling of his house.