Lumber: Prices Stall After Brief Rally
Domestic producers answered the bell when the U.S. announced it was placing tariffs on imports of Canadian lumber last March. Lumber mills almost immediately raised prices by 7%, according to Eugene, Ore.-based Random Lengths' composite price index for March. Higher mill prices were quickly passed along to contractors and ENR's 20-city average price for 2x4s jumped 4% in April, after increasing 2% in March.
The price rally broke a long slump but soon began to falter. Weak demand forced mills to roll back prices about 4% in both April and May, wiping out the March increase. ENR's price for the most commonly used species of 2x4s held steady in May before slipping 1% in June. While the June decline was relatively modest, it measures against a 4% increase during the same month last year. As a result, ENR's 20-city average lumber price tumbled 11% below last year's level after climbing to within 4% of 2001's price level in April. The setback in lumber prices was mirrored in the plywood market, where ENR's price was rolled back 2% after a 5% increase.
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