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Thoughts on wood product companies? BCC?
Old 03-19-2021, 09:52 AM   #1
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Thoughts on wood product companies? BCC?

The prices of OSB is $40 to $48 a sheet now in my area. 3/4" CDX is $58 a sheet.

Tree prices have not gone up that much....maybe $50 per 1000 bdft for douglas fir in the past year.

So....I am thinking something like Boise Cascade is going to be making bank this year.

Obviously I am not the first to think this as the shares have gone from $20 to $60 but the company looks fairly good still.

Not much net debt.

I would like it better at $45 though...maybe if we get an interest rate spike...
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Old 03-20-2021, 08:21 AM   #2
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I walked through a home improvement lumber section last week and noticed the prices were really high for OSB, Plywood, 2x4s, 2x6s, etc. Poplar and oak dimensioned lumber was crazy high!!

I am a hobby woodworker. I bought some air-dried white oak, walnut, 2x4s (SYP), and poplar a month ago and the prices I paid were substantially lower than those in the BORG. The prices were higher than I paid 5 years ago but not by much. This lumber is rough cut but much higher quality than Borg lumber.

Are the higher prices due to depletion of the core lumber sources (trees) or because of supply shortage related to Covid impacts? ie, are the bottlenecks in tree availability (trees dying due to beetles/acid rain, etc), tree cutting, log removal/transport to manufacturers, manufacturing process shortage of other raw materials needed to produce the finished product?

This makes me wonder if the price-jacking is temporary. Not saying I couldn't make some money on it, just feels like I would be getting in on the tail-end.

I have always been good at jumping in just before the tide falls.
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Old 03-20-2021, 08:55 AM   #3
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I walked through a home improvement lumber section last week and noticed the prices were really high for OSB, Plywood, 2x4s, 2x6s, etc. Poplar and oak dimensioned lumber was crazy high!!

Are the higher prices due to depletion of the core lumber sources (trees) or because of supply shortage related to Covid impacts?
To my understanding, wood prices are primarily reacting to demand. With so many people working from home now, they want home to be nicer. Also, there are so many things that you cannot do (and also spend on), there is money available for home projects that use wood.

I am in that boat too, planning to oak panel our den.
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Old 03-20-2021, 09:15 AM   #4
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I spent 10 years in the lumber industry. Lumber is normally the first to go and the last thing to come back. Enjoy.
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Old 03-23-2021, 04:54 AM   #5
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One lumberman redditor claims the reason plywood is even crazier is that the glue/binders used are also in short supply because these base components are also used in other essential pandemic items, such as hand sanitizer.

The demand is in basic building materials. Finer species are not as affected as noticed by Born2Fish above. Oak is out of style too.

Check out the chart here. I hope in a year or so this calms down. https://tradingeconomics.com/commodity/lumber
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Old 03-23-2021, 07:37 PM   #6
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A youtube house builder that I recently watched noted that his cost for all the wood used in framing a house had risen about 40% from the year before, before covid struck.

Related, there are reports of the recent Texas deep freeze having an impact on items like asphalt shingles since the petroleum production was greatly impacted. And with all the busted water pipes, there is a lot of demand for plastic pipes, which is raising prices across the country. Chairman Jerome Powell suggests that inflation will pick up but will be temporary. I am not so sure.
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Old 03-23-2021, 07:47 PM   #7
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Here in NC the good varieties of drywall mud are scarce. Texas is a factor, not because of manufacture, but rather they are sucking up supply. Lots of leaks results in massive drywall repairs
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Old 03-23-2021, 08:07 PM   #8
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Oh yeah, lumber is nuts. You can go to the depot and see a full bin and the next day it's gone. My contractors have to drive to get it frequently.

Covid times.
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Old 03-24-2021, 06:04 AM   #9
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I did a deck in June 2020 & pressure treated lumber was already scarce. Fast forward to now and price for a 2x6x12 has gone from $12.27 to $20.27.

I do a bit of cabinets and doors and prices seem a little more stable but still rising.
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Old 03-24-2021, 07:12 AM   #10
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A while back I spent about a day looking into what affects lumber prices. What I came away with was of course supply/demand. But the biggest bottleneck I found in supply was drying oven capacity and storage capacity for dried lumber near the ovens. Today I suppose rail transport limitations may be hurting distribution as well. YMMV
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Old 03-26-2021, 12:12 AM   #11
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A while back I spent about a day looking into what affects lumber prices. What I came away with was of course supply/demand. But the biggest bottleneck I found in supply was drying oven capacity and storage capacity for dried lumber near the ovens. Today I suppose rail transport limitations may be hurting distribution as well. YMMV
Was that in the US or international as well? Lots of international lumber products but there are shipping issues these days.
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Old 03-26-2021, 02:15 AM   #12
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We hold some West Fraser Timber (WFG) - currently up just over 104% since purchase.
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Old 03-26-2021, 08:59 PM   #13
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One lumberman redditor claims the reason plywood is even crazier is that the glue/binders used are also in short supply because these base components are also used in other essential pandemic items, such as hand sanitizer.

The demand is in basic building materials. Finer species are not as affected as noticed by Born2Fish above. Oak is out of style too.

Check out the chart here. I hope in a year or so this calms down. https://tradingeconomics.com/commodity/lumber
Plywood glues are urea/formaldehyde formulations. Neither would go into into hand sanitizer, although formaldehyde might go into embalming fluid. I suspect like others have said that this price rise is due to demand from people wanting to spruce up their residences while they are stuck at home.
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Old 03-26-2021, 10:27 PM   #14
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I have Louisiana-Pacific (LPX), which is doing well.

I also thought of Georgia-Pacific (past symbol GP) which is a lot bigger, but it is now privately-held. Hmmm... I used to hold GP, and sold at some point. It was bought out by Koch Industries in 2005, and I did not learn of that until now.
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Old 04-16-2021, 02:20 PM   #15
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Of course BCC is up 20% since I posted this

And of course I didn't buy any.

And of course I have to go out and buy some $78 plywood for our house which used to be $20 last year.
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Old 04-16-2021, 02:35 PM   #16
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Yeah plywood. When I first bought (2 months ago) it was $25/sheet. Then it was gone. Had to drive 20 miles to buy it (same store Home Depot) and it was $42.

Just was there today for other stuff and it's still $42 and they don't have any.
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Old 04-16-2021, 04:56 PM   #17
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The CDX stuff is a lot more than $42....I think it is $78.

1"-1/8" T&G is...wait for it...$109 a sheet

They are printing gold....they are not even paying much for wood, I think 1000BF has increased maybe $25 for fir and larch
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Old 04-16-2021, 05:16 PM   #18
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This stuff is 5 mm good both sides. The thicker stuff is 2 to 3X.
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Old 04-16-2021, 06:26 PM   #19
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The question is whether one should go ahead and build a home with interest rates at a virtual all time low. Or would it be cheaper in the long run to build now with cheap money and expensive building supplies?

Should someone wait for material prices to moderate even if the mortgage rate has the risk of going higher?

I've got a jack hammer and I've got a concrete mixer. 2021's projects will probably be done with concrete and wood projects be reserved for 2022.
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Old 04-17-2021, 02:39 PM   #20
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The CDX stuff is a lot more than $42....I think it is $78.

1"-1/8" T&G is...wait for it...$109 a sheet

They are printing gold....they are not even paying much for wood, I think 1000BF has increased maybe $25 for fir and larch
I spent 10 wasted years logging and in mills.

It takes a long time for increasing demand to increase prices fo manufacturing. Cuts for lack of demand are immediate.
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