Raging wildfires threaten lumber market, home builders’ costs

Falling prices could reverse course as extreme weather hits supply

National /
Jul.July 22, 2021 12:45 PM
Fires raging in the western United States are beginning to have a negative impact on lumber output. (Getty)

Fires raging in the western United States are beginning to have a negative impact on lumber output. (Getty)

Just as lumber prices were finally falling, wildfires and extreme weather are threatening to pull them right back up.

Fires raging in the western United States are beginning to have a negative impact on lumber output. Canfor, one of the biggest lumber producers on the continent, is among the companies cutting back production in response to the weather events, according to the Wall Street Journal.

Canfor is curbing output at mills in British Columbia, where the company is struggling to move lumber to and from the company’s facilities. It expects to reduce output by around 115 million board feet in the quarter. That’s a small portion of supply on the continent, but it could be a sign of things to come.

On Wall Street, traders bid up lumber futures Wednesday by the maximum daily amount allowed. September futures rose 7.75 percent, although they are still down 66 percent since the beginning of May.

Lumber futures were plunging just weeks ago, with home builders expecting to boost their profit margins rather than lower their prices in a hot residential market.

Extreme weather is threatening more than just lumber supply. Hydroelectric power output is also endangered by the extreme heat, and natural gas prices are at a seasonal seven-year high. And flooding forced a major metal producer in Germany to close a plant last week as copper prices soar.

[WSJ] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    Atlas Hospitality Managing Member Raj Guru and Vinod Chand with 711 Seventh Avenue (Atlas, Google Maps)
    Atlas plans 401-room hotel at 711 Seventh Avenue
    Atlas plans 401-room hotel at 711 Seventh Avenue
    Social Construct's co-founders Ben Huh and Michael Yarne (iStock)
    Proptech startup Social Construct shutting down
    Proptech startup Social Construct shutting down
    Nearly $10M settlement for “cooked” SF condo owners
    Nearly $10M settlement for “cooked” SF condo owners
    Nearly $10M settlement for “cooked” SF condo owners
    Soho’s zoning madness, such as artists-only lofts and a ban on ground-floor retail, may finally change with a proposed rezoning.
    The shopping district that banned retail: Soho’s incoherent zoning
    The shopping district that banned retail: Soho’s incoherent zoning
    L&L Holding’s David Levinson and Columbia Property Trust's Nelson Mills with a rendering of 261 11th Avenue (L&L, Columbia Property Trust, Terminal Warehouse)
    L&L, Columbia Property Trust land $1.3B loan for Chelsea office project
    L&L, Columbia Property Trust land $1.3B loan for Chelsea office project
    Towns and cities have begun restricting housing construction to save their supply of H2O. (iStock)
    “Why are we building houses if we don’t have enough water?”: Towns react to scarcity
    “Why are we building houses if we don’t have enough water?”: Towns react to scarcity
    (iStock)
    Locals: Put housing, not warehouses, on landfill site
    Locals: Put housing, not warehouses, on landfill site
    A rendering of 19 Hausman Street (M Development)
    Nightmare darkens for largest Brooklyn condo project of 2019
    Nightmare darkens for largest Brooklyn condo project of 2019
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...