Lumber Prices Dip After Hitting New Highs

Also buried in yesterday's Wall Street Journal was an article about lumber prices (p. C3). After peaking at $378.30 per thousand board feet, the highest level since April 4, prices are slipping (now at $364.80). The decrease in price is due to seasonal changes (less domestic construction in winter) and new lumber mill capacity coming on line. The price run-ups were due to sales of U.S. lumber to foriegn countries (China bought 701 million board feet, or 35% of total U.S. output, last year). The additional capacity being added is a good sign because it shows confidence in America lumber producers that the market for lumber (and, by association, construction) is getting warmer, yet the increasing production will keep prices in check.