Lumber, plywood prices skyrocket

New York Times via Houston Chronicle ^ | May 1, 2004 | BERNARD SIMON

[snopercod]

TORONTO — Lumber and plywood prices have shot up so rapidly in recent months that they are tearing the profit out of home construction for some builders and threatening to dent the booming housing market.

Paul Kuszmaul, president of Kuszmaul Builders in Champion, Ohio, said the run-up in prices had left him unsure whether to push ahead with a condominium development in the Mahoning Valley, between Pittsburgh and Cleveland.

Since January, he said, the cost to build each condo unit in the project had risen $4,000, largely because the price has more than doubled for oriented-strand board, a widely used substitute for plywood made by pressing long wood strips together using adhesives.

The product has been rapidly displacing plywood as a construction material because it is cheaper to make, can be made from the limbs and roots of trees as well as trunks, and is more uniform in quality. Almost three-fifths of all structural wood panels now sold are oriented-strand board, or OSB, compared with a quarter in the early 1990s.

Prices of both OSB and plywood reached records one week last month. According to Random Lengths, a trade publication, 1,000 square feet of -inch OSB sells for $503 in the north-central United States; this time last year, the same amount cost $170. Half-inch four-ply southern pine plywood is up to $523 for 1,000 square feet, from $240 a year ago.

Plywood prices began to rise last year in late May and early June, dropping late in the year, before increasing sharply in January.

Prices of other types of lumber have also risen, although less sharply. And the buoyant metals markets, especially for steel, have also driven up costs.

"It's almost a rocket ship ride," said Jim Enright, general sales manager at Rosboro Lumber, a plywood manufacturer in Springfield, Ore. "The activity level since the beginning of the year has been phenomenal."

The ride has been less exhilarating for buyers. Brian Catalde, president of Paragon Communities, a builder in Playa del Rey, Calif., said that the cost of the lumber used in building a typical entry-level home had roughly doubled in 18 months, to $24,000.

A handful of manufacturers dominate the OSB market. Five companies account for three-quarters of all sales in North America. They are Louisiana Pacific, Weyerhaeuser and Georgia-Pacific in the United States, and Nexfor and Grant Forest Products in Canada.

One reason for the price surge is that production of the boards has not grown fast enough to make up for the loss of plywood, because of the closing of older plants.

[antaresequity]

No the quote was wrong and I divided by 33 sheets per unit not 66

In Marin, today, right now, its 21 bucks a sheet if you buy a whole unit. 66 sheets.

[Petronski]

Golden State is quoting 20.94 and 21.20 a sheet [CDX/OSB]

That guy's "mistake" might have been an attempt to see if you'd pay it. $21 is much more, uh, reasonable(?).

[Freesofar]

Build with concrete.
You can incorporate wood grain effects if you must.
I could use the work.

[antaresequity]

Last house I built we were paying 14-17 bucks a sheet for 8,9,10 foot sheets by the unit.

[Petronski]

Whew.

[Vigilantcitizen]

Sorry for the confusion

No apology necessary. I have problems with math sometimes myself. :)

[VOA]

Another happy byproduct of the environmental / ecoterror movements.

They'd rather dead trees over-crowd forests, create hugh wildfires...
and they complain about the need for more funding on reducing "particulate pollution".

The EPA and the enviro-wacko job sectors: great work if you can get it.
And learn how to do without sleeping at night or ever looking into a mirror.

[DefCon]

"...Five companies account for three-quarters of all sales in North America. They are Louisiana Pacific, Weyerhaeuser and Georgia-Pacific in the United States, and Nexfor and Grant Forest Products in Canada..."
- - -
I happen to work for one of the companies named.
Lumber prices are experiencing a perfect storm, of sorts.

-Demand is up due to the low interest rates for mortgages.
-Demand is up due to some very large government contracts.
-Supply is down due to the shut-down of a lot of production units when prices were so low a few years back.
-Supply is down due to some of the more recent HUGE (hugh)environmental costs that the "little guys" could not afford and/or justify.
-Operating costs for the plants are up due to higher energy costs.
-Wood supply (trees) is a little low.
-Transportation costs are up due to fuel prices.

Meanwhile, my company stock is doing quite well.

[snopercod]

I put diagonal 1x12 T&G clear heart redwood siding on the first house I built in the mid 70's. $680 per thousand. Those were the days.

[Skooz]

Don't worry about it.

We built our home in 2002, and I ran out of money before it was completed. We moved in Labor Day 2002 and lived on subfloors for awhile.

We've just been doing it as we can get to it. We are about a year behind schedule right now, but it is going well.

I think I appreciate it more this way.

[snopercod]

I'll use straw for reinforcement if I can figure out how to keep it from floating to the top.

LOL! You gots to roll up y'alls pants and mash it down with yore bare feet. Doncha' know nothing?

[boxsmith13]

"All this inflation could be enough to trigger a new recession...that's what I fear."

yup. Commodity pricies are starting to look more and more like 1974. Youre right the recession will likey begin in early 2005. It took about 6 months plus for the Arab oil embargo in Oct 1973 to cause unemployment to rise.


China's out of control growth is responsible for all this commodity inflation. But if andwhen China bursts, there will be massive deflation. China will cause the world's economy to go through massive inflation then deflation cycles

[moehoward]

Good luck. Finished our major remodel last fall. *whew*
Cost double the "absolute final estimate" price.

[RightWhale]

Concrete is great stuff. There was concern that concrete wouldn't survive the interior Alaska climate, but a couple project buildings in the 30s and 40s showed there wasn't a problem after all. Not a huge problem anyway aside from the really short pouring season.

[RightWhale]

Of course! Should have been obvious. :)

[antaresequity]

I usually never buy the stuff by sheet, let alone the square foot...Its always Unit cost...

33/44/66 sheets for 1",3/4,1/2 by the unit.

You can save alot of money over time if you order your stuff in units, or lifts.

If you need 46 2 x 12, buy 48, because they stack them 4 wide in a unit...

2 x 12 4 wide
2 x 10 5 wide
2 x 8 6 wide
2 x 6 8 wide
2 x 4 12 wide

The dispatcher will build your load and get it to you sooner if you don't waste his lift operators time by picking through stacks.

If they guy can just peel off layers or lifts with the fork lift, you get better service, better pricing, more tee shirts.

Its like ordering 45 pounds of nails...only a 'minute horny clockwatcher' would do somthing like that...

lol

[snopercod]

I love it when you talk cementitious ;-)

Everybody in these parts (NC) builds block foundations, but it's not like Florida where they build whole houses out of block (for a good reason).

I had to be different of course and poured 10" concrete walls for my basement. I kinda' wish I hadn't specified the 4000PSI stuff though, I can't hardly drill a hole in those walls with a masonry bit, let alone a low-velocity powder gun.

[RightWhale]

'05 would hit whoever is President then really hard. Might be the silver lining in a dark cloud Kerry admin should that disaster befall us.

[snopercod]

I dont think the world is even remotely prepared for the impact China is going to have on the global economy.

If they buy stuff from America for a change, that will be fine by me.

[rodguy911]

Will I be reading about how the enviro-nazias screwed this up any time soon,probably not in my lifetime.