Lumber Prices to Remain at Elevated Levels During First Half of 2021

SEATTLE (Scrap Monster): The lumber prices moved higher towards end-2020, following a pullback in the preceding two months, said RBC Capital Markets in its recent market report. Going into 2021, the prices are expected to continue to remain at high levels during the initial half of the year, mainly driven by robust demand on account of strong spring building season.

According to Paul Quinn, analyst at RBC Capital Markets, the prices for lumber and wood panels surged during the month of December last year, mainly due to strong housing markets. The unprecedented rebound in wood product prices has boosted profits for Canadian forestry companies. On the other hand, it has led to higher home and renovation costs to homeowners and buyers, he added.

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Shortage of Lumber Feared to Paralyze the U.S. Housing Market

The Canadian Home Builders’ Association noted that homebuilders are likely to hit by price volatility and short supply of certain wood products. It becomes hard for them to operate when lumber prices witness unprecedented surge. High lumber prices have added up substantially to the cost of houses in Canada, said Kevin Lee, CEO of the Association.

The composite price estimate for lumber in 2021 has been raised to an average of $575 per thousand board feet.