As Americans emerge from stay-at-home orders, commodity prices, like that of lumber, are soaring. Will Horner and Ryan Dezember report for The Wall Street Journal:
Lumber futures have soared since the start of April, driven by cutbacks at mills, signs that the home-building season might be salvaged and brisk business at home-improvement stores.
Among major commodities only gasoline and crude oil, up up 81% and 62% respectively since March ended, have seen a sharper rise as Americans emerge from stay-at-home orders .
Random Lengths’ report for last week described “tight supplies in all species,” mills booking orders into the second half of June and “scorching home center demand” for southern yellow pine, often used for fencing and decks.
Interfor, which was producing at just 50% capacity earlier this month, has led a surge in lumber-producer shares. Since March 23, its stock has gained 95.
D.R. Horton Inc. executives said April sales wound up only 1% down from last year after a strong finish to the month. The country’s largest home builder had earlier told investors sales were off by double-digits. Its shares have shot up 37% over the past month.
Meritage Home Corp., which sells houses that are typically priced just under $400,000, said that April orders fell 15% from last year to 775, but that sales have picked up….. The company’s stock is up 67% over the past month.
Hamir Patel, a forest-product analyst with CIBC Capital Markets, said home-builder orders are encouraging for lumber demand and suggest that the massive job loss during the pandemic has been concentrated “among low-income households that are not typically in the market to own a home.”
“Home Depot Inc. and rival Lowe’s Cos . reported strong quarterly earnings last week.
Trump“Clearly, the customer is re-engaged with DIY,” said Home Depot CEO Craig Menear. “ There’s no doubt about that.”
By Will Horner and Ryan Dezember