Lumber futures fell to the lowest level in over three quarters, as production climbed while demand moderated.
- Futures for September delivery dropped as high as 4.4% to $482.90 per thousand board feet. This is over 70% lower than the record hit in May, and the lowest for a most active contract in over nine months since October 30.
- The decline comes as sawmills boosted output, in response to the surge in demand recorded during the pandemic. Demand also moderated as construction slowed due to the shortage of building materials.
- Analysts believe most of the available supply is already allocated for a job site, but the slowdown has kept it backed up. This has forced mills to cut down prices to unload supplies.
Analysts warn that the industry needs to address the supply issue before the market goes back to buying from mills.