A spike in demand, whether for immediate repair needs or longer-term rebuilding, for Plywood and Oriented Strand Board (OSB) always causes a surge in price.
Modern mills are very efficient at turning logs into 2x4s and sheets of plywood. Lumber and plywood prices are so high now because of the short-run dynamics of demand and supply. Wood demand shot up in the summer of pandemic. Many homeowners were stuck at home, unable to vacation.
Will plywood prices drop soon?
“Looking ahead, hope abounds that construction starts will soon begin a more robust rebound forecast in the first quarter. Plywood prices will rise 39.8% this year, says IHS Markit.
Plywood and lumber prices overall experienced an extreme spike in the early part of 2021, peaking in early May and dropping quickly to levels approaching but not yet matching pre-pandemic prices in July.
When will plywood prices drop?
Lumber and plywood prices will drop as demand falls. … By the end of 2023, the strong increase in demand for housing will be over. At that point, lumber and plywood sales will drop to more normal levels.
Are wood prices still rising?
Lumber prices may have fallen, but they are still elevated, creating new headaches for the critical housing sector.
There are three primary reasons why lumber prices were much higher than normal. There are fewer lumber mills. The first reason has developed over many years: a consolidation in the number of sawmills to refine the raw product. In fact, employment at sawmills is down 30% from 20 years ago. Sawmills are capital intensive endeavors.
Lumber and plywood prices have jumped through the roof in the U. S. Building materials prices will retreat in 2022, returning to pre-pandemic levels by 2023.
Since the last time we touched on the subject in early September of 2020, the cost of lumber has already started to decrease substantially. It has dropped from $948 per thousand board feet in September to now $565 per thousand board feet in early November.
A question we ran across in our research was “Why are lumber futures dropping?”.
The most common answer is; the planned increases in supply are the primary reasons why lumber futures are dropping. However, “futures” are speculation about market prices in the future and do not mean current lower retail prices. Two experts at Fastmarkets RISI explained 6 reasons why demand is expected to remain high, which are summarized well in an article in Markets Insider. The reasons they shared are as follows:.
Why is OSB price increasing?
Oriented Strand Board, or OSB, has long been used as a low-cost alternative to plywood, but the product now fetches a higher price as increased demand and tight supplies lead to delivery delays and elevated construction costs in the U., and and canada.