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  • Business - Market Data
  • Updated: July 13, 2021

Lumber Gives Back All of 2021's Gains As Demand Recedes

Lumber Gives Back All of 2021's Gains As Demand Recedes

Lumber, which was one of the best-performing commodities earlier this year, has officially wiped out all of its staggering gains for the year.

Prices at Monday’s close are now down 0.6% for the year as demand eases and supply expands in response to earlier gains. The rally turned a common building product into a social media sensation and a flashpoint in the debate over U.S. monetary policy.

At one point, lumber futures were trading as high as $1,733.50 per thousand board feet, more than quadruple the level of a year earlier. This was a terrifying period for homebuilders as historically high prices for lumber threaten to keep housing costs high for the foreseeable future.

Lumber’s decline is one the most dramatic examples of the easing in commodity prices after rallies in raw materials from copper to corn earlier this year fueled concern that rising costs would undercut the economic recovery.

Last month, U.S. Federal Reserve Chair Jerome Powell cited lumber’s decline as evidence that price pressures will cool as supply bottlenecks from the reopening economy are worked out and stimulus fades.

Lumber for September delivery fell 5.6% Monday to $712.90 per thousand board feet on the Chicago Mercantile Exchange (CME).

 

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