Member access

4-Traders Homepage  >  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

Recommend :
React to this article
Latest news
Date Title
1m ago SAMSUNG ELECTRONICS : Apple jabs Samsung over unpopular smartwatches
3m ago ARAB BANK : List of our alleged Hamas clients 'grows like Pinocchio's nose'
4m ago China central bank survey shows business confidence dips in third quarter
7m ago AMAZON : Alibaba - Journey of the tech giant
7m ago TD AMERITRADE : Another day, another NFLer charged
7m ago PAN PACIFIC : Singapore's belief in Tianjin
7m ago TENCENT : Alibaba's IPO to end US dominance in technology sector: expert
7m ago KINGDREAM PUBLIC : Sinopec takes over 67.5% stake in Kingdream
7m ago Hotel roundup
7m ago TUNIU : Mobile gadgets play a growing role in business travel market
Latest news
Hot News 
DIXONS CARPHONE : Phones 4u buyers still sought, but 800 jobs safe
Ahead of the Bell: Pier 1 Imports (Ahead of Bell)
NEW MEDIA INVESTMENT : Announces Pricing of Public Offering of Common Stock
RITE AID : Reports Net Income of $127.8 Million and Adjusted EBITDA of $364.2 Million for Second Quarter Fiscal 2015
MSCI : Yes bank dropped from msci standard & mid-cap indices
Most Read News
5h ago INTEL : Tapping the growing tablet market
4h ago HOME DEPOT : breach bigger than Target at 56 million cards
5h ago Alibaba IPO prices at top of range, raising $21.8 billion
1h ago ORACLE : Ellison steps aside, co-CEOs Catz and Hurd take over
4h ago JETBLUE AIRWAYS : names former British Airways exec CEO, shares rise
Most recommended articles
4m ago China central bank survey shows business confidence dips in third quarter
15m agoDJChina Loan Demand Declined in 3Q - PBOC Survey
23m agoDJNewest iPhones Hit the Market Down Under
26m ago Sterling firms as early results go against Scottish independence
Dynamic quotes