As the home market and export demand from China rebound, lumber prices reached an 8-year high near the end of 2012, according to the Los Angeles Times.
In late December, lumber purchasing contracts for March delivery reached nearly $400 per 1,000 board feet on the Chicago Mercantile Exchange. Lumber mills, which were hit hard during the housing slump, are expected to ramp up production by having workers work longer hours.
Low inventory also contributed to the price surge. Economic forecasters believe lumber producers were caught off guard by the demand spike, further inflating prices. Once production catches up with demand, the Los Angeles Times reported, prices are expected to fall to $300-320 per 1,000 board feet at the start of the second quarter.
