Lum­ber prices out­shin­ing gold and sil­ver

The Daily Telegraph - Business - - Front Page - By Tom Rees

GOLD prices may be close to record highs – but a less eye-catch­ing as­set is still out­shin­ing the pre­cious me­tal.

This year’s best per­form­ing com­mod­ity is in­stead the hum­ble wooden log, af­ter the value of lum­ber surged amid a DIY boom trig­gered by home­own­ers spruc­ing up their prop­er­ties dur­ing lock­down.

The price of lum­ber fu­tures has more than dou­bled in 2020 due to buoy­ant de­mand and low stock lev­els, made worse by mill shut­downs dur­ing the height of the Covid cri­sis.

Surg­ing costs have sent lum­ber to a record high of more than $850 per thou­sand board feet, rack­ing up quadru­ple the gains en­joyed by gold and out­per­form­ing a 67pc surge in sil­ver prices. The one-month fu­ture on lum­ber has jumped more than 50pc in the last month alone, ac­cord­ing to Refini­tiv.

The rock­et­ing wood price could be a sign of re­cov­ery in the US, ac­cord­ing to an­a­lysts. In­vest­ment in homes has helped push prices higher and gen­er­ally points to growth in the world’s largest econ­omy, said BCA Re­search an­a­lyst Mathieu Savary.

How­ever, other ex­perts have warned the sud­den price surge could hurt the prop­erty mar­ket be­cause it will lift the cost of build­ing Amer­i­can homes. The Na­tional As­so­ci­a­tion of Home Builders has es­ti­mated that the lum­ber rally had in­creased the av­er­age price of a new home in the US by $14,000 (£10,700).

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