The Globe and Mail reports in its Friday edition that lumber prices are on the upswing.
A Dow Jones dispatch to The Globe reports that an American government study on
Tuesday showed new-home construction
in the United States
jumped 20.2 per cent in April, to
the highest level since November,
2007. The report is the first good
news for housing, which
accounts for about 40 per cent of
U.S. lumber demand, following
several months of lukewarm
data. The housing surge, the biggest
monthly gain in percentage
terms since February, 1991, is likely
to extend a recent rise in lumber
prices, unnamed analysts say.
Lumber futures hit a three-year
low last week, but since then
they have rebounded 11 per cent
to trade Thursday at $270 (U.S.)
per 1,000 board feet. The turnaround
started as traders who
had sold futures, betting on a
price decline, bought contracts to
lock in their gains. The rally accelerated
after this week's construction
data.
Now some investors are betting
that prices will rise further if the
U.S. housing industry gets back
into swing and if China, which
accounts for about 20 per cent of
U.S. lumber exports, sees
demand pick up as authorities
move to spur economic growth.
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