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Lumber prices - question on how lumber prices change?

housebuilding126
hace 8 años
última modificación:hace 8 años

This may be a dumb question, but I know nothing about lumber and was just curious. I got an estimate for lumber in October that has been revised a few times and received a final estimate in 11-23-15. We are getting ready to place the order tomorrow. The prices of the lumber have not changed in that time. I know the price of lumber changes all of the time and when I look at the market, it looks like the price of lumber recently decreased. How does this work for the consumer?

Comentarios (3)

  • PRO
    Cancork Floor Inc.
    hace 8 años

    Lumber is a weird business. Not just "supply and demand" but what is in the "pipe line" or sitting on someone's land. Wood "keeps". That means they could have hundreds of thousands of tons of wood at the sawmill but if the prices drop too low, the mill shuts down production or simply lays off workers for weeks or months at a time.

    The mill reduces out put...therefore helping to create a MINUS in the local stock. This then can help drive up local wood prices. Once the prices go up again, the mills hire everyone back, ramp up production and go, go, go.

    The species and country of import has a lot to do with pricing as well. The USA has import duties and Canada has stumpage fees. The wood industry is not part of the free trade agreement...the wrangling has been going on since the 60's.

    And the market also plays a part. Lumber has maximum prices that the market can handle. Anything over that and sales drop quickly. So lumber producers will try to keep the price hovering around that "maximum". They maximize their profits during "cheap" lumber...and then maintain "thinner" margins when the price of lumber soars.

    It is so dynamic. So complex. And yet local mills have a small effect on pricing. Remember: The American Dream = make as much money as possible. Cheap lumber prices (source material) means bigger profits. Maximize your profits when you can. A simple business model.

    Only in SEVERE recessions (the 2008 crash wasn't enough to cause a big price change) will lumber depreciate to the point where the final product is really cheap.

    housebuilding126 agradeció a Cancork Floor Inc.
  • PRO
    ULTIMATE HARDWOOD LTD
    hace 8 años
    Don't forget the rate of new construction,our weak ass dollar,the lumber tariffs imposed by the US and the economy. A few years back we were hit with 3 price increases. That's not easy to deal with for a small business.
  • PRO
    Smith Forest Products
    hace 8 años

    Lumber fluctuates everyday. For the end user to see a drastic change in pricing the "market" has to drop significantly. I am a southern yellow pine trader and often find myself in Lowes or Home Depot looking at pricing. From what I have discovered, both stores will change prices daily. As a rule of thumb I say buy cheap in the winter and high in the spring. A few thing go into that statement, if you look at logging in the winter months it slows down as well as construction. On the flip side, with loggers slowing down due to nasty weather and difficulty getting larger logs 2x10 and 2x12 generally go up in price. However, the past 3 years we have had a rally in the winter and the market as pretty much plummeted in the spring time. Bottom line is, I wish I had a crystal ball to see the future and help you out more.

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