Lumber prices outshining gold and silver
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).