[HN Gopher] Why wood has gotten so dang expensive
___________________________________________________________________
Why wood has gotten so dang expensive
Author : Whitespace
Score : 206 points
Date : 2021-06-27 15:11 UTC (7 hours ago)
(HTM) web link (constructionphysics.substack.com)
(TXT) w3m dump (constructionphysics.substack.com)
| praptak wrote:
| Okay, people stay at home more, so they need more space, so
| there's demand for construction.
|
| What about the spaces people used to occupy before covid moved
| them home? Does it drive demand for demolition?
| cpach wrote:
| I guess people hope to return some day. To public libraries,
| pubs, restaurants, etc.
| rantwasp wrote:
| i wish this was a demand and supply thing but I am really
| afraid this is going to turn out to be inflation. And it's
| actually all the prices that are going up - we're just talking
| about wood because we have a good narrative around it.
| Robotbeat wrote:
| 10 to 20% would be really high inflation but we're talking
| about like 200 or 300% wood prices. Nah, even if we happen to
| have higher inflation than any other year in the last
| century, lumber prices will still fall a lot.
| treis wrote:
| Lumber prices have tripled for dimensional lumber. It's
| clearly a short term supply/demand thing and not an inflation
| thing.
| rantwasp wrote:
| why not both?
|
| IMHO inflation is real and it's going to bite us hard
| lazide wrote:
| What people consider 'bad' inflation is too much
| money/demand chasing constrained supply that can't keep up.
|
| If it is a required/needed good, that causes people to
| raise the amount they are willing to spend to get what they
| need. Inflationary spirals happen when this 'infects'
| enough markets. Everyone is spending all their money
| chasing an ever harder to get/more expensive set of
| essentials, and are willing to spend more and more as time
| goes on as they get more desperate.
|
| Lumber is probably negotiable/non-essential enough it's not
| likely to kick off an inflationary spiral. Food, rent,
| transportation, though tend to be key.
| rantwasp wrote:
| lumber is used in construction. no construction? less
| housing. less housing? more rent.
| alkonaut wrote:
| Office rents will probably take a hit in the new normal but I'm
| guessing everyone now just waits to see what happens.
|
| What's clear is that many of us with two people who will work
| from home a lot the coming years have at least one room too few
| and are building extensions. My builder bought a $25k load of
| materials and left it on my lawn before summer for an extension
| they'll build in August, because their supplier advertised that
| prices would increase 50% in July.
| mcguire wrote:
| Weren't rents in SF falling drastically in the second half of
| 2020?
| seaorg wrote:
| Take it from a guy who works in the industry.
| https://youtu.be/zCvEFXSYFS8
| RickJWagner wrote:
| I'm a wood working hobbyist.
|
| I used to pay about $3 for an 8 foot 2x4 at the local big-box /
| lumber store. I looked this week -- $9 for the same lumber!
|
| I'm going to wait for this to blow over before I build anything,
| I think.
| kevinthew wrote:
| Great summary and analysis. The context on the cracker shutdowns
| in February makes it all the more clear. This processing
| bottleneck has been playing out across the commodities sphere as
| the 2nd order impacts from COVID play out.
| AtlasBarfed wrote:
| When will empress tree farming start? it's vields are 2-4x the
| rate of other woods and supposedly is construction usable?
| avhon1 wrote:
| That seems unlikely in the U.S., since it's an invasive species
| that out-competes native trees.
|
| https://www.invasivespeciesinfo.gov/terrestrial/plants/princ...
| Robotbeat wrote:
| How is that an argument against farms of it? Does Europe not
| grow maize because it's a New World crop?
| Ryan_Goosling wrote:
| Seems like a valid argument. I wonder what an
| environmentalist would have to say, considering a bird can
| carry seeds away from a farm, right?
| ur-whale wrote:
| Is this just a US thing or is it global?
| RyanGoosling wrote:
| Guys, maybe you can help me. Should I buy a house in California
| in this market? Or will it all crash when the foreclosure ban
| ends at the end of July???
| mothsonasloth wrote:
| I am in Scotland and we are struggling for all sorts of
| materials:
|
| - PIR insulation
|
| - Membranes (DPM, Roof membranes, Vapor check)
|
| - External Cladding (red cedar, siberian larch)
|
| - Concrete
|
| I've had all range of excuses; Covid19, Brexit, Suez Canal and
| Americans are stealing lumber from Europe.
|
| There are some lumber mills in the Highlands of Scotland that are
| shipping CLS and other framing timber straight to USA.
| myself248 wrote:
| > Americans are stealing lumber from Europe
|
| I'm picturing Carmen Sandiego putting a freighter full of
| lumber in her pocket...
| barnyfried wrote:
| Land owners in the south are getting squeezed by the mills to the
| point there's almost no profit in growing trees. Some of them are
| turning to selling "renewable energy" in the form of wood pellets
| for "renewable energy" power plants.
|
| In other words, its more profitable to burn trees then sell them
| to sawmills.
|
| Pretty interesting how I was bag-shamed at the grocery store
| years ago using paper bags. And now those same people are using
| paper bags. I guess in the rock paper scissors of woke
| environmental policy, dolphins always beat trees.
| jjav wrote:
| Any good source for a graph tracking lumber prices week to week
| at the retail shelf (as opposed to futures pricing which is easy
| to find)?
| humbleMouse wrote:
| This is old news, lumber futures are around 800 dollars now.
| typon wrote:
| "old news"? That's still double the price compared to 2019
| spamizbad wrote:
| They're now at 775. They are still declining rapidly.
| simplify wrote:
| What website do you use to monitor this?
| 0x53 wrote:
| https://www.nasdaq.com/market-activity/commodities/lbs
| pjc50 wrote:
| That looks uncannily like the Bitcoin price chart.
| quickthrowman wrote:
| The Bitcoin chart looks like the 18th century south sea
| bubble chart:
|
| https://en.m.wikipedia.org/wiki/File:South-sea-bubble-
| chart....
|
| https://en.m.wikipedia.org/wiki/South_Sea_Company
|
| Bubbles are not a new phenomenon by any means
| beebeepka wrote:
| "in the US"...
|
| This habit if speaking as if one is the center of the universe is
| a bit tiring
| selfhoster11 wrote:
| I understand that this website is SV boy's club, but really I
| expect something more from an audience that is more
| cosmopolitan and world-educated than the average.
| echelon wrote:
| All that vitriol for not adding a clause to make you feel
| included?
|
| The majority of HN posters are probably in the US.
|
| I don't get upset when articles are posted about the Bay
| Area, where I don't happen to live.
| publicola1990 wrote:
| I will make a guess that majority of HN readers are outside
| the US of A.
| da_big_ghey wrote:
| No, number are about half split in two:
| https://news.ycombinator.com/item?id=26869936
| OJFord wrote:
| Not GP but that does surprise me too. I would've guessed
| USA by far the largest single country, but <<50% total.
|
| (dang does say there that's a few years old, so could've
| changed a bit, but I think I would've guessed the same
| then too.)
| selfhoster11 wrote:
| It's not vitriol, it's an objective observation that this
| website is by and for a specific audience. Perhaps my
| phrasing is pithy, but that is on purpose.
| hn_throwaway_99 wrote:
| This type of defense is totally disingenuous. You refered
| to this website as "SV's boys club", and now are arguing
| you are just being "pithy".
|
| I neither live in SV nor am a boy and that doesn't have
| any impact on the value I get from this site. The fact
| that the majority of users are from the US and hence some
| articles have a US focus is also unsurprising.
| bdcravens wrote:
| Is it? There's only about 3 million people in SV; Houston or
| Chicago are larger. While SV may have a disproportionate
| representation on HN, that area is likely still a small
| percentage of the users here. (as a single data point, I'm in
| Houston)
|
| edit: according to dang, about 10%
|
| https://news.ycombinator.com/item?id=26869936
| kube-system wrote:
| Lumber price soared globally as well, for the same reasons.
| COVID was a global thing, after all.
|
| https://m.dw.com/en/demand-for-lumber-soars-in-germany-and-s...
|
| That being said, as the article mentions, most lumber in North
| America is from _Canada_ , not the US.
| unnah wrote:
| Also, lumber is traded globally. US buyers have been
| importing more lumber from Europe during COVID than before. I
| guess that means that the demand has been higher in the US.
| qwertox wrote:
| The shortage isn't that much a result from the pandemic and
| people doing more DIY-projects, but because the US and China
| (and also Germany, if we talk about local wood) are building
| a lot of houses. China buys more wood from Germany now that
| Russia has set an export ban on wood. The only odd thing
| which I see is that the export ban is supposed to start in
| January 2022 [1] so I don't understand why China is already
| starting to buy more wood from Germany.
|
| [1] https://www.margulesgroome.com/publications/russias-
| proposed...
| kube-system wrote:
| Those DIY projects, increase in home improvement, and
| increase in housing demand has been due to the changes in
| people's consumption patterns because of changes in
| people's work patterns due to the pandemic.
| oblak wrote:
| I understand but the article is clearly written with the US
| in mind. In that sense, adding a few more letters, for
| context, would've been appreciated.
| jbay808 wrote:
| Yes, I can confirm that lumber prices in Canada went sky-
| high.
| syops wrote:
| If a large enough percentage of users of a site are from a
| given country then isn't it natural that those users will
| unconsciously make a corresponding assumption in their posts.
| This is especially so since for most Americans talk about
| neighboring countries is low.
| h2odragon wrote:
| The is from May; prices have fallen quite a bit off peaks I hear
| and some speculators are now trapped under big loads ordered 2
| months ago now being delivered.
|
| There's "we bought a sawmill!" ads here in the rural lands now
| for fresh sawn green pine and oak; which isn't "lumber" yet in
| any useful sense. I've seen porches being built that won't last
| the summer.
| pengaru wrote:
| plywood at my local home depot is still very much at its
| highest price ever when I checked last week ($135 for a 1-1/8"
| 4x8 sheet of t&g subfloor)
|
| > There's "we bought a sawmill!" ads here in the rural lands
| now for fresh sawn green pine and oak; which isn't "lumber" yet
| in any useful sense. I've seen porches being built that won't
| last the summer.
|
| The allegedly "kiln dried lumber" home depot has been selling
| has been criminally wet throughout the last year too. Not only
| have people been paying through the nose for the stuff, it's
| been nowhere near ready to use. I had to let boards I bought
| for building gambrel rafters sit for a month on my covered deck
| before attempting to cut them to the pattern. And even after
| that, a bunch of them shrunk another 1/4" from the pattern in
| the subsequent month of waiting for me to install. Infuriating
| to pay so much for stuff that isn't even top quality and ready
| to go. I also had to throw a few away from splitting and
| twisting during the drying process...
| gotorazor wrote:
| KD-HT is a pretty standardized, commodity product. I used to
| work at a lumber yard on their Heat Treat process. I am
| pretty sure that the lumber I see at Home Depot are the same
| lumber that I use to work on. It's not like they have their
| own mills and ovens. They buy the same commodity lumber like
| everyone else.
|
| TBH, the lumber yard I worked at you to flood. We would have
| bundled stacks of lumber float all across the yard. We can
| pretty much take them the next day and ship them to a
| construction site. KD-HT lumber is pretty good like that.
|
| Now, most of our large customers just have a reasonable
| expectation of the product. It's wood. It's gonna warp. It's
| gonna split. It's like most things like fresh fruits, or
| meat, or leather. There is a lot of variability.
| axaxs wrote:
| Yeah, prices are still ridiculous. Apparently it takes a
| couple months for the aforementioned price drops in futures
| to trickle down. If HD bought it for 100, they ain't gonna
| sell it for 50 regardless of what sawmills are doing(unless
| of course forced to with overstock and such).
| sokoloff wrote:
| If the market-clearing price that their competitors are
| selling it for is $50, they'll sell it for around $50 or
| they won't sell it.
| YokoZar wrote:
| You two are saying the same thing. If they won't sell due
| to an uncompetitively high price, then they'll have
| overstock. Then they'll be "forced to" sell lower.
| sokoloff wrote:
| I'm saying they'll do it even if they're just normally
| (or even partially) stocked with material. They know
| their customers are cross-shopping them with other
| stores, they need to be competitive, and they don't want
| to lose the rest of the order lines nor train customers
| that they're not competitively priced.
| rootusrootus wrote:
| > criminally wet throughout the last year too
|
| That is not a recent thing. Home Depot wood has been dripping
| wet for many years. It's routine to put a screw into it and
| have water running past the head as you tighten it. I
| typically buy 50-100% more than I expect to use on the
| assumption that a good chunk of it will warp as it dries and
| become useless.
| pengaru wrote:
| Most of my big diy home construction projects happened to
| overlap with the pandemic, and when I described the wet
| lumber problems to a local with more building experience he
| was so confident their lumber was properly kiln dried he
| attacked my ability to measure and cut properly...
|
| I'm not sure if I should feel better or worse about the
| situation knowing home depot has been doing this long
| before the pandemic.
| LambdaComplex wrote:
| I'm pretty sure it's common knowledge that the lumber
| from the big (blue and orange) box stores is incredibly
| lacking in quality.
| abakker wrote:
| That wood from Stimson is the worst ever. I don't think
| you can buy worse. I've used all sorts in my life and HD
| consistently has lumber that cannot even be used to start
| fires until you dry it.
|
| Plywood is fine, but if you need anything you build to
| last, buy pressure treated at HD, or buy plain lumber
| somewhere else.
|
| (I bought some 2x4s for a non-permanent project during
| the pandemic. It was so soft and wet that when I fired a
| railgun into one of the pieces, the nail went all the way
| through. That should not happen)
| LambdaComplex wrote:
| Whenever I go to Lowes, I always like to go by the lumber
| section (even when I'm not there for lumber) just to see
| how warped the dimensional lumber is. It's always a
| depressing experience.
| justinator wrote:
| Just making sure you're not buying the pressure treated
| wood?
|
| HD sells pressure treated wood that's then kiln dried
| (KDAT), if you would like to open up a large line of credit
| with them.
| rootusrootus wrote:
| No, just garden variety 2x4x8 kiln-dried studs. Normally
| a few bucks apiece but going for closer to ten right now.
|
| YMMV, but for people who need actual kiln-dried wood it's
| usually a better option to go to a real lumber yard.
| xienze wrote:
| > The allegedly "kiln dried lumber" home depot has been
| selling has been criminally wet throughout the last year too.
|
| Eh it's always been that way. Warped and with plenty of knots
| too. It was considered poor quality back when a 2x4 cost
| $2.50.
| cptskippy wrote:
| Oddly the good stuff wasn't much affected. I was making a
| work bench and picked up a 4x8 of red oak plywood for under
| $60 in May. Not what I would normally use but half the price.
| dugmartin wrote:
| I was in Home Depot a couple of days ago (in Western
| Massachusetts). Crappy 19/32 CDX was $85 for a 4x8 sheet.
| Sitting right next to it was 3/4" oak veneer at $60. I
| think it would be pretty funny to sheath a house in sort of
| cabinet grade plywood (it is 7 ply Purebond which usually
| has a couple of voids per sheet).
| xyzzyz wrote:
| Yeah, this is strange, especially as red oak plywood is
| mostly the same thing as normal plywood, the red oak is
| just a thin veneer on the face. I've been buying cherry
| lumber recently, and they went from something like $4.50/bf
| to $6.50/bf here. Significant increase, but not 3-fold.
|
| Now that I think of it, it kinda makes sense: it's not the
| timber that's gotten more expensive, but the service of
| milling it. For products from relatively more expensive
| hardwood timber, milling costs constitute smaller fraction
| of the final cost, so even if milling costs triple, the
| final product might only go by 50%.
| munificent wrote:
| It's more than just that. You can see weird price changes
| like this because of the limits of substitution.
|
| Imagine you've got a project to build a bookcase. You're
| using cheaper normal plywood for hidden structural parts
| and nicer but more expensive red plywood for the stuff
| people will see. You price the whole thing out.
|
| Then the price of wood skyrockets. To keep the price of
| the whole project under control, you start cutting costs.
| You use more of the cheaper plywood for the whole project
| and decide to skimp on the red oak.
|
| Scale that across many projects and you get a paradoxical
| result where the cheapest goods in a category go up in
| price while the better goods don't, because people are
| subbing out the "cheap" stuff for the good stuff.
|
| https://en.wikipedia.org/wiki/Giffen_good
| ethbr0 wrote:
| FWIW, substitutability is a hard problem with algorithmic
| pricing, even for relatively stable inventory categories
| like big box construction retail.
|
| I'd guess (with some insider knowledge) that (1) there
| wasn't any prebuilt link to adjust substitute pricing &
| (2) Depot didn't care enough to adjust pricing.
|
| Both Depot and Lowes are in it for volume and long-term,
| which is why they don't do things like spike generator
| prices after hurricanes.
| abakker wrote:
| A friend of mine in CT has problem now in the hardwood
| supply chain. The issue is that the kiln drying backlog
| has now caught up with hardwoods as many kilns are full
| of fir and pine. The supplies of paint grade poplar and
| soft maple are running quite low now.
| JoeAltmaier wrote:
| Green sawn wood is usually stacked, and the stack's own weight
| will hold the boards relatively straight as they dry.
|
| Build something, and the whole structure can bend and curl.
| hn_throwaway_99 wrote:
| It seems like the spectacular boom in home renovation will have
| to lead to an eventual bust at some point - people generally
| don't want to do a major renovation that often.
|
| That said, it seems like the huge spike in building materials
| did a very good thing by making many people postpone
| renovations until prices come down, which should help smooth
| out the peak-to-trough chart of building construction.
| bcrosby95 wrote:
| > There's "we bought a sawmill!" ads here in the rural lands
| now for fresh sawn green pine and oak; which isn't "lumber" yet
| in any useful sense. I've seen porches being built that won't
| last the summer.
|
| I'm curious why this is. Is it the drying stage, or something
| else?
| alamortsubite wrote:
| Yes. The wood will twist and bend as it dries.
| monetus wrote:
| - Which, for those curious, is the the whole idea behind
| greenwood carpentry.
|
| https://en.m.wikipedia.org/wiki/Green_woodworking
|
| Its a shame more of that craft isn't going around. Granted,
| I'm not sure how a greenwood porch would work.
| jjeaff wrote:
| Wouldn't work well at all for any construction that isn't
| using mortise and tenon or some other type of friction
| fit construction. Can be disastrous for traditional
| construction where pieces are butted up together and
| nailed.
| h2odragon wrote:
| Green white oak, especially, can do some cool stuff. I
| imagine you could do a porch with lap built and grain
| matched construction and get a "tensegrity" bonus as
| stuff dried; but ive never seen that trick done with
| anything more complicated or smaller than house siding.
| ArkanExplorer wrote:
| https://en.wikipedia.org/wiki/Wood_drying
|
| Wood for construction needs to reach an equilibrium moisture
| point with the outdoor air after its cut.
|
| If its dried outside, it takes months to years to dry,
| depending on the humidity level and temperature.
|
| The wood is dried because it makes it lighter, and the
| shrinkage and swelling has already played out during the
| drying process... instead of when its in place!
| drewzero1 wrote:
| Yes, wood that is used to build something before it has been
| dried will warp and curl.
| tastyfreeze wrote:
| You can build out of green lumber. But, as wood dries it will
| twist, warp, and crack. If you happen to live somewhere humid
| building with green wood is an invitation for fungal rot. For
| both durability and square building it is better to dry the
| wood first.
| silon42 wrote:
| I'm sure there's plenty of "almost dry" wood in California.
| rootusrootus wrote:
| You can frame up houses, but code usually mandates no more
| than 15-19% moisture before you can close the walls up, for
| exactly that reason.
| divbzero wrote:
| It's fascinating how consistently the shortage and glut cycle
| plays out across a diverse range of commodities. The common
| elements seem to be an undifferentiated product and some delay
| in the production cycle. The length of shortage and glut
| depends on the length of delay, which is exacerbated if
| production depends on fixed assets that take a long time to
| build and a long time to wear down ( _e.g._ ships).
| dragontamer wrote:
| It was clearly a sawmill issue. Lumber was expensive but timber
| was cheap.
|
| I don't know how to calculate if more sawmills are needed
| (permanent backlog) or if it's a temporary backlog. I figure
| that speculation is for the commodity traders and maybe some
| stock / sawmill speculators.
|
| In practice, guess and check may scale better? But I've also
| been to towns where the sawmill shut down and destroyed the
| local economy, so guess and check may be immoral (even if it's
| somewhat profitable)
| yskchu wrote:
| Yes it has fallen a lot (nearly 50%) from the May peak:
|
| https://www.google.com/amp/s/www.businessinsider.com/lumber-...
| dev_tty01 wrote:
| Yeah, its a shame the article left off what is probably one of
| the biggest reasons for the price spike. Speculation. 4x price
| spikes in a relatively stable commodity aren't explained by
| simple supply/demand economic factors. The article is a couple
| of months old and we can now see the speculative bubble
| unwinding.
|
| https://markets.businessinsider.com/commodities/lumber-price
|
| Down 8% two days ago. Down over 50% from the peak. No doubt
| prices will remain above trend for a while, but 4X is just
| another case of speculative nonsense over-amplifying the
| realities.
| asdfasgasdgasdg wrote:
| Is it speculation or is it hedging? We weren't speculating on
| toilet paper when it was massively out of supply early in the
| pandemic. Rather, there was a demand shock, and maybe a bit
| of a supply shock too. If TP's spot price had been
| meaningfully allowed to float, I have no doubt that it would
| have traded at 4x its long term average, even if you had
| factored in only consumer demand.
|
| All that is to say I don't see compelling evidence here that
| speculation is the cause of the problem. I can as easily see
| more benign explanations.
| arcticbull wrote:
| Is there a meaningful difference between speculation and
| hedging - besides the intent to take delivery? People
| hedging with the intent to take delivery are simply
| speculating that the price would go up. Maybe it makes more
| sense to separate out along those lines instead.
| asdfasgasdgasdg wrote:
| Yes, I think there is. Speculation is trading activity
| with the intent to profit from a change in price. Hedging
| -- in the sense I'm talking about -- is buying an asset
| to guard against a change in price or shortage. You can
| certainly see them as similar things, and in some sense
| they are, but I think there would be broad agreement that
| this sort of hedging does not deserve the same scorn that
| some have for speculators.
|
| Even if the activity is exactly the same, most people
| tend to feel differently about an activity because of its
| motivation. The motivation to obtain large profits is
| held in much less respect than the motivation to guard
| against personal shortage. Also, corporate behaviors in
| general get a lower prior amount of esteem than
| individual and household level behaviors.
|
| We can definitely talk about whether people _ought_ to
| view these things differently, but there is little
| question as to whether they currently _do_.
| BurningFrog wrote:
| This may just be a Russel Conjugation.
|
| https://tomdehnel.com/what-is-russell-conjugation/
| ketamine__ wrote:
| How does speculation drive the price of lumber up?
| kevin_thibedeau wrote:
| I'm keeping fingers crossed copper will fall back down. I was
| pricing out some heavy gauge wire last year for a project and
| passed because I wasn't ready to work on it. Now I'm kicking
| myself for not pulling the trigger.
| themodelplumber wrote:
| Just from a technical perspective, the 1Y chart on that page
| shows some real promise, for example higher highs and higher
| lows on multiple time scales.
|
| I'm not terribly interested in lumber but if you want a good
| price, with that chart it seems like now may be a great time
| to buy given the current low. It may also be the last time at
| that price level for a while. (No promises, just what I'd
| speculate based on the chart)
|
| Edit: To clarify, this comment is mostly registering my
| surprise. I see no cabal speculation activity, just a big
| invite for your neighbor to buy some for their active
| retirement fund at these levels. Think about that as another
| variable.
| catillac wrote:
| I can't quite tell if you're either lampshading/mocking
| speculator thinking or if this is sincere. But the thinking
| behind the above comment largely seems to be the source of
| all the problems.
| themodelplumber wrote:
| Is this thinking _really_ the source of all the problems?
|
| I have to admit I expected to see something idiotic when
| I clicked through to the link! Like, "pshah, pure
| speculation!" but instead I am looking at a chart that
| any broker worth their salt, even a conservative one,
| might green-light for a client right now, today. So I'm
| sharing what I'm seeing and no, this doesn't perfectly
| fit a speculation-cabal mindset.
|
| IOW: This is clearly a price level where your non-cabal
| types will happily buy in and take a reasonable profit
| later.
|
| For all we know, the really evil ones could have brought
| it down to this level. So are we going to pin the blame
| on those millions of people attempting to prepare for a
| retirement?
|
| And there's nothing wrong with sharing another
| perspective, is there, really?
|
| Nobody's even proven, or shown how speculation is the
| source of the problem. It's just expected that we simply
| believe that? Speculation could be a side effect for all
| we really know.
|
| I've been trading technicals for years, and a huge lesson
| you learn is that everybody has a "why", and everybody
| has a story, but it always comes late. You then turn
| around and see the same patterns in nature and start to
| realize: "Why" can be a terribly unhelpful and misleading
| direction to take your solutions-oriented mindset.
|
| If you want to cut down on speculation, IMO you need to
| look into things critically, deeply, and everybody's
| "why" ought to be first. Was it _really_ speculation? Or
| are speculators just watching natural patterns unfold and
| joining the ride?
|
| Metaphorically: Even if it feels amazing to pin the blame
| on the fox who got into the hen house, do you want to go
| after every fox in the forest, or maybe understand the
| fox better--draw the foxes around to another location, or
| design a hen house with doors on it?
|
| I visited the link with an open mind. But I have
| experience with charts like that and I can tell you,
| people will buy here, and the price will very likely go
| up again. I just think that we can do better, creatively
| if we want to "solve" the greater lumber issue.
| edoceo wrote:
| It seems you are working from a theory built around price
| "anchoring". It's a proven bad model.
| themodelplumber wrote:
| Nope, not price anchoring. And how do you effectively
| prove a negative anyway...I see people profiting from
| models that were long considered voodoo. Always manage
| risk.
| catillac wrote:
| Yes, it's clear speculation is the source of much of
| this, "all" was hyperbole on my part.
| themodelplumber wrote:
| > fairly clearly speculation is the source of much of
| this
|
| That's a hand wave. You don't want to open your mind and
| look at different perspectives, fine. But let's not ever
| think of such a position as a high-quality one.
| catillac wrote:
| Okay that seems reasonable.
| punkrex wrote:
| My FiL works in the industry on large projects, and the word
| from suppliers is that in Jan, prices should drop 50% from
| where ever Dec ends up, as there is going to be a ton of
| supply.
| qwertox wrote:
| Just today I was listening to a German podcast on this topic
| ("Warum Bauholz zurzeit knapp und teuer ist") [1]. Main
| explanation of it having become so expensive in Germany as well
| is the high demand in the US, China and in Germany itself. Russia
| has set an export ban on wood, so China is buying more from
| Germany.
|
| Germany currently has a surplus of wood, yet the prices aren't
| low. Sawmills are the main benefactors of the current situation,
| they're processing wood like never before, also because last year
| a lot of trees were affected by beetles, fungi, storms and the
| like. So this lower quality wood (which is perfectly fine to use)
| has been mainly exported. 40% of the processed wood is exported.
|
| Sawmills are buying the trees for cheap due to the surplus that
| the forest owners (around 96% of the owners own less than 20 ha)
| are saying that they're now considering to stop selling wood and
| wait for the fall or next year if they can handle it.
|
| Then again, if they stop selling the wood, the state- or
| community-owned forest owners (around half of the German forests
| are privately owned, the other half by the state or communities)
| might not be able to to pay for the machinery and workers which
| usually work the entire year around. Also private owners have got
| together and share machinery and personell which needs to get
| payed during the entire year. So to some degree they are forced
| to continue cutting down trees to sell them.
|
| [1] https://www.deutschlandfunk.de/probleme-der-baubranche-
| warum...
| cube00 wrote:
| It was sad to hear the larger construction companies using their
| buying power to purchase all available stock and store in their
| warehouses with no assigned jobs. They were pushing smaller
| construction companies to the wall when they couldn't access any
| stock for jobs they actually had on.
| sokoloff wrote:
| If you are a construction company and anticipate a
| possible/likely disruption in one of your critical raw
| materials and have the funds to protect your business, what
| else would you do? It doesn't sound predatory; rather it sounds
| eminently sensible.
| SQueeeeeL wrote:
| Tragedy of the Commons is sensible. Businesses exist to
| maximize their own existence. Must suck to be one of those
| tiny firms lol
| mathgladiator wrote:
| It's like the real-life monopoly game being played in real
| life. Buy up all the houses, don't upgrade them to hotels until
| you can buy them back.
| aazaa wrote:
| The article is from May. A lot has happened since then.
|
| This chart of lumber futures gives an idea of the recent past
| (zoom out 1-5 years for perspective):
|
| https://www.tradingview.com/chart/?symbol=CME%3ALBS1!
|
| In a nutshell: a huge advance and now what appears to be a crash
| (~ -50%) is currently in progress.
|
| The bigger picture is how indicative this compressed boom-bust
| story is of the future of the surge in US inflation. Lumber is
| showing us how easy it is for the market to reject ridiculous
| prices. What's unclear is how low lumber, and other
| goods/commoditiies that have seen similar booms, can go.
|
| Edit: this links seems to work better
|
| https://www.tradingview.com/symbols/CME-LBS1%21/
| ketamine__ wrote:
| Chart doesn't load. I'm on Brave. What am I missing?
|
| Downvotes? Really? Eat shit.
| yhoneycomb wrote:
| Doesn't load for me either (Firefox)
|
| edit: Doesn't even load on Chrome. I think it's just a bad
| link. Or a bad site.
| aazaa wrote:
| Odd. I found a better link:
| https://www.tradingview.com/symbols/CME-LBS1%21/
| GeorgeTirebiter wrote:
| Why has wood gotten so expensive? It's not like this stuff grows
| on trees! Oh, wait....
| [deleted]
| SavantIdiot wrote:
| "Because the storm occurred with very little warning, many
| factories weren't able to shut down properly, resulting in
| polymers congealing and solidifying in the equipment"
|
| Wow, I'm surprised there weren't back-up generators if power
| failure means machine destruction.
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