world news - 27.07.2007

Wood products prices rise slightly

Wood products prices have flattened for most of 2007. Now, prices are trending up a bit this summer although the increase could be seasonal. Still, Hemlock fir 2x4s in the Pacific Northwest averaged $286 per thousand board feet this month. “We always see it (lumber) up in the spring and summer,” Bernard M. Markstein III, staff vice president of forecasting and analysis at the National Association of Home Builders tells MarketWatch.com. But, he adds that, with housing still weak, lumber "is not going back to $400 (per 1,000 board feet) any time soon."

Lumber prices have slumped because of slowed housing demand in the U.S., which is not expected to begin to recover until the second half of 2008, according to ScotiaBank economists. In fact, it’s called “the chaos afflicting lumber and building materials caused by the retreat in homebuilding” by Fitch Ratings analyst Dennis Ruggles.

There was a 12% drop in lumber prices in the second quarter and an 11% slide in plywood prices. Actually, a market basket of lumber and plywood prices trended down by almost 24% in 2006, according to Purchasingdata.com, and bottomed out in December.

www.purchasing.com

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