On Monday we highlighted a remarkable fact about the buying frenzy in the US lumber market: lumber futures were up for 16 consecutive days, a stretch without a down day since March 26, and while they did dip on Tuesday, the have more than recovered this latest decline, and are now up 19 of the past 20 days.
This surge in lumber prices to record highs, which was driven by an unprecedented shortages coupled with soaring demand by homebuilders...
... has also translated to unprecedented events in the supply chain, with Bloomberg today reporting a remarkable episode showing how extreme America's shortage of lumber has become: For the first time in recent memory, a lumberyard was the one selling wood to a supplier.
Needless to say, this kind of trade - where a customer sells goods to its traditional supplier - is virtually unheard of.
MaterialsXchange, a Chicago-based digital trading platform for physical wood products, reports that the trade involved a lumberyard selling about 30,000 square feet of oriented strand board, or OSB ( a cheaper stand-in for plywood that is widely used to make house floors and walls).
"Building materials are moving from company to company in nontraditional flows," said MaterialsXchange co-founder and CEO Mike Wisnefski. He added that prices have gotten so high that some homebuilders are being forced to cancel projects, leaving certain lumberyards with a little "excess inventory."
On Wednesday, his company brokered another OSB sale involving a US East Coast lumberyard selling to another one in Arkansas at $1,500 per 1,000 square feet, surpassing a record $999 that was reached at the end of March, based on Random Lengths pricing.