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    Staggering Lumber Rally Has New Homes Going for $16,148 More

    Abstract:The North American lumber industry is having its craziest year in memory -- and that was before the wildfires.

      The North American lumber industry is having its craziest year in memory -- and that was before the wildfires.

      Weyerhaeuser Co., the continents biggest wood producer, said Monday that the blazes that have blanketed much of the Western U.S. sky in an apocalyptic orange had reached four of its timber operations in Oregon. All employees were safe, the company said, but several mills temporarily cut back their shifts.

      Thats the second natural disaster to rock the industry in 2020. In March, producers idled sawmills during the coronavirus lockdown. Just a month later, pent-up demand exploded. Homebuilders broke ground on a surprising number of new houses, and do-it-yourselfers, fortified by government stimulus checks, took on home repairs and remodeling jobs they were able to tackle while under quarantine.

      In the wake of that volatility, futures have climbed 57% this year, and even after falling from a record high last month, prices are still on pace for the largest gain since 1993.

      Smoke turns the sky orange over San Francisco, Sept. 9. Wildfires have so far kept away from acreage used for timber production.

      {12}

      Photographer: David Paul Morris/Bloomberg

      {12}

      “Everyone stopped and took a breath right after Covid hit to see what the supply-demand constraints were going to look like,” said Joe Sanderson, managing director of natural resources at Domain Timber Advisers LLC, which owns or invests in 283,000 acres in various locations around the country. “Based on all the activity related to people fixing up their decks, or building a new addition on their house, weve seen that demand pick back up.”

      在比较正常的时候,一些客户会垫他们的关注库存,商业林地可能化为泡影了。但是,现在这就是不可能的,因为供应短缺。

      {} 18 “我们正处在一个前所未有的市场,”梅森说。 “没有供应的洪水和需求没有减少。” [18] 梅森说木材价格会浸在第四季度,但回来强在2021年,受需求的一拨,由目前的不足部分延迟提振。上个月,期货达到每1000板尺830.90 $空前的高。目前的价格,$ 640还是比一般过去五年高68%。

      “如果你看到一些钢厂努力保持我不会感到惊讶在钢厂面前的原木供应,”德文鳕鱼干,惠好公司的首席执行官,一个虚拟的会议报告在星期一说。

      了解更多:数以百万计甲虫是消灭森林所有横跨世界

      {777} 通过供应和需求如此失控,挥发性猛增。考虑Weyerhaeusers性能。股价在三月失去了一半以上的价值,才使这一切回来七月底。 {} 777 尴尬地的价格波动有在全国泛起涟漪。通过较高的材料成本大幅提升,平均新的单户住宅在八月的售价为16148 $超过它在四月中旬那样,根据住宅建筑商协会。一个新的多户住宅的平均价格比同期提高$六一○七

      “住房一直是一个亮点,如果没有亮点,在最近几个月整体经济,”罗伯特·迪茨,为营建集团首席经济学家说。

      需求强劲

      需求仍然强劲。七月份,美国新屋销售跃升至最高的I近14年来,以提振报告出走城市向郊区和历史低位的抵押贷款利率。在Home Depot Inc.,一家供应商到周末木匠,木材是在第二季度的表现最好的部门,根据特德德克尔,销售的零售商的执行副总裁。

      {16}

      Now lethal wildfires look like theyre about to have an impact on the industry. Logging bans, closed railroad lines and shuttered mills in the Pacific Northwest have added tension to what Kevin Mason, managing director at ERA Forest Products Research in Kelowna, British Columbia, calls “an incredibly tight supply chain.”

      {16}{17}

      In more normal times, some customers would pad their inventories on concerns that commercial timberlands could go up in smoke. But thats impossible now due to a supply shortage.

      {17}{18}

      “We‘re in an unprecedented market,” Mason said. “There’s no flood of supply and no reduction in demand.”

      {18}

      {20}

      Mason said lumber prices will dip in the fourth quarter, but come back strong in 2021, boosted by another wave of demand, delayed in part by the current shortage. Last month, futures reached an all-time high of $830.90 per 1,000 board feet. The current price, $640, is still 68% higher than the average over the last five years.

      {20}{21}

      “I wouldn‘t be surprised if you see some of the mills struggling to keep the log supply in front of the mills,” Devin Stockfish, Weyerhaeuser’s chief executive officer, said during a virtual conference presentation Monday.

      {21}{22}

      Read more: Millions of Beetles Are Wiping Out Forests All Across the World

      {22}{777}

      With supply and demand so haywire, volatility has soared. Consider Weyerhaeusers performance. Shares lost more than half their value in March, only to make it all back by the end of July.

      {777}

      {25}

      Lumbers price swings have rippled across the country. Boosted by higher material costs, the average new single-family home sells for $16,148 more in August than it did in mid-April, according to the National Association of Home Builders. The average price of a new multifamily home has increased by $6,107 over the same period.

      {25}

      {27}

      “Housing has been a bright spot, if not the bright spot, for the overall economy in recent months,” said Robert Dietz, chief economist for the homebuilders group.

      {27}{28}

      Strong Demand

      {28}{29}

      Demand remains strong. In July, U.S. new-home sales jumped to the highest in nearly 14 years, buoyed by a reported urban exodus to the suburbs and historically low mortgage-interest rates. At Home Depot Inc., a supplier to weekend carpenters, lumber was the best-performing department in the second quarter, according to Ted Decker, the retailers executive vice president of merchandising.

      {29}{30}

      Other construction data show what a roller-coaster year its been. In January, builders broke ground on the most new homes since 2006, before the Great Recession. By April, that number had plunged 42%. At the end of July, it was back to flirting with the 14-year high.

      {30}

      Still, economic pressures lurk on the horizon. Direct U.S. government stimulus to taxpayers has run out, joblessness remains high and the two natural disasters -- wildfires in the West and the spread of coronavirus most rampant in the South and Midwest -- remain out of control.

      “A lot of us wonder how long can the demand for home purchases be this strong without a more meaningful recovery in the labor market or the broader economy,” said Richard Moody, chief economist at Regions Financial Corp. in Birmingham, Alabama.

      {34}

      Mark Wilde, a senior analyst at BMO Capital Markets in New York, said he‘s been involved with the lumber market for 30 years and has never seen anything like what’s been happening in 2020.

      {34}

      “This has been pretty singular in terms of volatility,” he said.

      (Adds company comments starting in second paragraph, updates prices in fourth paragraph.)

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