Since Russia invaded Ukraine, lumber prices have jumped 14% to $1,452, putting them just below the all-time peak of $1,711 per thousand board feet recorded last May, according to a report in Market Insider and other publications.
Futures have been on a wild ride since the onset of the COVID-19 pandemic, and those price swings are expected to get even wilder.
The war in Ukraine has "just aggravated the bull market we have in commodities," said David Russell, VP of market intelligence at online broker-dealer TradeStation. "With the bull market in commodities like oil and a lot of metals that we've been seeing, that only gives extra support to something like lumber."
Pressure is being placed on western governments to impose sanctions and bans on Russia’s forest industry, which could cause more price disruptions. Russia is the largest lumber exporter in the world, and its forest-product exports were worth more than $12 billion last year.
Even before the war began, lumber prices were volatile. In January, they fell 15%. Since February 1, they've soared 55%. Just prior to Russia launching attacks on Ukraine February 24, a report from the Wall Street Journal noted prices of leading lumber futures were so wild that they ended at daily limits in 25 of 35 trading sessions this year.
De-escalation in the Russia-Ukraine war may not offer much price relief either as several factors have been applying upward pressure. The US housing shortage and a continuing focus on home improvement are keeping demand high. And flooding in the key lumber hub of British Columbia last year has kept distribution snarled and supply chains constrained.
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