Wooden products and solutions pricing surge expected to persist, elevating 2021 home, renovation expenses
CALGARY — An unpredicted rebound in wood product selling prices this thirty day period is boosting earnings for Canadian forestry companies but leaving house owners and purchasers with the prospect of bigger household and renovation charges in 2021.
In a report, RBC analyst Paul Quinn states charges for lumber and wood panels are up in December thanks to solid housing marketplaces and restricted capacity to maximize North American production next a seasonal softening of price ranges in Oct and November.
He states upcoming year could be even brighter for producers than 2020, including that document significant selling prices set previous summer season as COVID-19 forced folks to do the job from residence will likely keep on or be eclipsed in 2021.
Kevin Lee, CEO of the Canadian Home Builders’ Association, suggests the value volatility and shortage of source of some wooden items suggests builders are acquiring problems having benefit of the present-day robust market for new houses that is envisioned to continue in 2021.
He suggests escalating lumber and panel costs this yr have additional as a lot as $30,000 to the design charge of a regular 2,500-square-foot (232-square-metre) property in Canada.
RBC states it also expects more mergers and acquisition activity in the forest items business upcoming yr subsequent the just lately announced $4-billion all-stock takeover of Norbord Inc. by West Fraser Timber Co. Ltd.
“As we head into 2021, we have viewed unprecedented pricing degrees to shut out 2020 with (lumber) rates moving better next a pullback in Oct/November,” stated Quinn in the report.
“With desire probable to get stronger as dealers get prepared for what should really be a very solid spring setting up period, we hope that costs will keep on being at a significant level all through the first 50 % of the year.”
This report by The Canadian Press was very first revealed Dec. 23, 2020.
The Canadian Push