By Alison Coughlin, CME Group
乍看上去
- Pandemic shutdowns meant people had nowhere to go, so they bought bigger homes or tackled home renovation projects
- “Last year was our busiest in 10 years of business and we expect 2021 to continue on that trajectory,” says one home builder
The lumber market in 2021 continues to reach new highs that were unthinkable just a few years ago. Historically, lumber traded in the $200 to $400 per thousand board feet (mbf). However, since 2018, supply and demand factors have caused unprecedented volatility and soaring prices.
Source: Bloomberg (LB1 Comdty).
Limited Supply, Exceptional Demand
The current lumber market is a confluence of limited supply – both long term and short term – and exceptional demand.
云杉，松树和加拿大西部，太平洋西北和加拿大东部有三个主要采购点。虽然在后两者的生产相对一致，但近年来，加拿大都面临了事件，导致生产减少。据迈克尔·纳蒙德（Michael Almond）称，总经理Canfor, long term availability of raw timber has been decreasing in recent years.
Prior to 2015, forests were susceptible to the mountain pine beetle. Once the mountain pine beetle epidemic had been placed under control in British Columbia, a sustainability plan was put in place to regrow impacted forestland. This has led to lower annual harvests over the past couple of years – a plan that will continue for another decade. Coupled with less timber availability, 2019 saw lumber prices so low that it cost sawmills more to produce and export boards than they could sell them for, which led to the closure of a number of sawmills. Mr. Almond estimated that approximately 3 billion board feet were taken out of production between 2019 and 2020. When demand started to ramp up in mid-2020, the sawmills were already producing at capacity and are unable to increase the amount of lumber coming to market.
Demand for lumber skyrocketed in the summer of 2020, bolstered mostly by demand for housing and DIY housing projects. The shutdowns that occurred as a result of the novel coronavirus meant people had nowhere to go and less places to spend their money, so they started to look for bigger homes or began to tackle home renovation projects. Existing home inventory levels are low, and housing starts continue to rise, signaling a steady demand for real estate.Stinson Dean, owner of Deacon Lumber, says he is “watching interest rates.” Mr. Dean emphasized that even though rates are increasing, they are still significantly lower than average, which is helping to drive demand.
Source: U.S. Census Bureau, LIRA from JCHS.
As shown, demand is not just increasing for new housing – it is increasing for home renovations as well. “Overall, the net demand for renovations feels very strong with so many people spending the majority of their time at home. People aren't spending money on vacations, restaurants, and events, so it seems they are putting into their homes,” said Jeffrey Mayra, owner of Relevant Homes. While Mr. Mayra reports that some colleagues have had clients hold off on projects in hopes that raw material prices come down, he also noted that “last year was our busiest in 10 years of business and we expect 2021 to continue on that trajectory.”
Through the Roof
The tumultuous nature of the lumber market over the past year cannot be overstated. As seen below, lumber prices over the past two decades have tended to stay within a relatively firm range, with little intra-year movement. However, three of the last five years have bucked that trend completely.
Source: Bloomberg (LB1 Comdty).
So far, 2021 prices have already ranged from $650/mbf to over $1,000/mbf. Similar patterns were observed in 2018, with housing demand skyrocketing until interest rates grew and cooled the market. Ultimately, 2021 has set multiple pricing records and the continued inverse of the forward curve indicates that demand isn’t diminishing yet.
审查定价数据也出土了一些其他有趣的定价趋势。在过去的二十年中，第一季度最常见的年度最高的价格。从2000年至2020年，第一季度大约有40％的最高价格观测结果。此外，从2000年到2008年的住房崩溃，今年下半年几乎总是低于平均水平（年度）价格，但由于恢复以来，这种趋势并未持有真实。自2010年以来，季节性尚未符合，低于年初或年底或夏季的平均价格偶尔。
过去一年中的木材价格上的狂野波动无法预料到锯木厂因供应减少而闭幕，或者由苛刻的房地产和家居装修。过去的价格趋势可能能够提供上下文，但这些因素的汇合已经历来无与伦比。
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