Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Backlog Puts the Wood to Lumber Prices

04/20/2014 | 08:55pm US/Eastern
By Kelsey Gee 

Lumber prices are near the lowest levels in seven months, after a cold, wet start to spring has delayed construction and kept potential buyers away from the housing market.

Now, market watchers are waiting for the inevitable spring thaw to shake loose lumber that has been building up in warehouses and at sawmills across North America, while searching for signs of demand from U.S. home builders.

"Last year everyone was irrationally exuberant about the spring and about how fast the housing recovery would take hold," said Steven Chercover, an analyst with D.A. Davidson, an investment-management firm in Portland, Ore. "This year, we were optimistic, but had the worst winter in decades" in parts of the Midwest and East Coast.

The winter halted construction and caused transportation bottlenecks, with heavy snows preventing trains and trucks from moving not only lumber but other commodities as well. As the snow melted, competition from grain and energy shippers left a lot of lumber stuck at mills and warehouses. That left the Canadian National Railway Co. to issue a rare embargo notice to wood and pulp producers in March to say it would stop moving lumber products until the backlog was cleared.

"Whenever the perception is out there that there's lumber piled up like there is now, the psychology feeds into a real bearish market," said Paul Harder, a lumber trader with Dakeryn Industries, a wholesale distributor in North Vancouver, British Columbia

Lumber traded on the CME fell to as low as $323.50 per 1,000 board feet last week, the lowest for any front-month contract since September and ended down 1.1% on the week.

Temperatures again dropped below during the week, with some states receiving snow, continuing to damp optimism about new construction and lumber.

Meanwhile, a spate of housing indicators that have shown a more-sluggish-than-expected appetite for building materials at the start of the year also has sent jitters through the market. The number of new homes under construction, known as housing starts, rose 2.8% in March to a seasonally adjusted annual pace of 946,000, according to the Commerce Department, below market expectations of 965,000.

Still, some analysts are confident the market will recover.

Daryl Swetlishoff, head of research at Raymond James in Vancouver, noted a strike by Canadian truckers has ended, easing another transportation chokepoint, and said he expects the North American market will absorb the lumber stockpiles.

"Wood is flying again, [and] demand should be healthy going forward," Mr. Swetlishoff said.

Write to Kelsey Gee at kelsey.gee@wsj.com

React to this article
Latest news
Date Title
10:06p JPMORGAN CHASE : Announces 2015 Dodd-Frank Mid-Cycle Stress Test Results
10:06p ZHONGSHAN BROAD OCEAN MOTOR : Patent Issued for Connecting Structure between Volute of Blower and Conversion Interface
10:06p HONEYWELL : Patent Issued for Protective Coatings for Ceramic Matrix Composite Substrates and Methods for Improving the Wear Resistance Thereof and Coated...
10:06p SHIMANO : Patent Issued for Bicycle Sprocket
10:06p ESSA BANCORP : Bank with Lehigh Valley branches expands through $25M acquisition
10:06p SUBARU : Morgan Hill: Tip leads police to arrest four, return stolen property
10:05p Konecranes Replaces 24 Hoists for Cenex Harvest State CHS Near New Orleans, LA
10:05p Patent Issued for Hall Thruster, Cosmonautic Vehicle, and Propulsion Method
10:05pDJAsian Shares Higher After Fed Meeting
10:05pDJAsian Shares Higher After Fed Meeting; China Falls Slightly
Latest news
Advertisement
Hot News 
DOMINO PRINTING SCIENCES : survey uncovers marked differences in serialisation readiness
ALPHAFORM : Provisional bankruptcy administrator appointed (DGAP Adhoc)
QUINTAIN ESTATES AND DEVELOPMENT : UK's Quintain in takeover talks with U.S.-based Lone Star - Sky News
SYLVANIA PLATINUM : Quarterly Report: 30 June 2015
CML MICROSYSTEMS : Confident In Improved Profit As First Quarter In Line
Most Read News
06:01p EQUITY ALERT : The Rosen Law Firm Files Securities Class Action Lawsuit Against Advanced Drainage Systems, Inc. – WMS
07:06p Facebook profit falls 9 percent as costs soar
08:11p BOEING MAY MOVE WORK ABROAD WITH EX-IM FUTURE UNCERTAIN : chairman
08:54p Patent Issued for Tracking with Consideration of Mobility
09:34p Patent Issued for Receiver Circuit
Most recommended articles
09:58pDJBrazil Central Bank Raises Benchmark Rate, Indicates Tightening to End -- 2nd Update
09:52pDJSamsung Profit Falls as Smartphone Sales Disappoint
09:51pDJAustralian Home-Building Approvals Slump in June
09:35pDJAsian Shares Higher After Fed Meeting
09:26pDJITG in Talks to Settle SEC Probe of Alternet Securities