Why is the price of plywood rising?

With the increase in building, the price for lumber goes up. This is a simple supply and demand situation that we are currently experiencing. Until the supply starts to catch up with the demand, people will continue to pay very high prices for their lumber. This is a factor that will apply to all types of lumber, including plywood.

If there is a log supply issue in one of the states on the west coast where a lot of lumber comes from, the cost of plywood goes up. You may notice that some of the recent forest fires have caused the prices of lumber to increase quite a bit. Plywood also has glue mixed in with it.

You may be thinking “Why are plywood prices skyrocketing?”

Some sources claimed 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.

Are plywood prices going down?

The price of plywood has been soaring into the stratosphere in recent weeks, and analysts are telling us that it will remain high for the foreseeable future. Memes about plywood have started to pop up all over social media, but this is no joking matter.

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.

When will plywood prices drop?

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.

Why are lumber prices skyrocketing?

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.

When is the price of lumber expected to drop?

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.