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Framing lumber prices are at historic lows

The downward trend in the housing market has affected the lumber and panel markets, which have been greatly impacted by the decline in housing starts.

Random Lengths, a weekly newsletter based in Eugene, Ore., has been reporting prices, analyzing markets and examining issues affecting the wood products industry for more than 60 years. The newsletter tracks softwood lumber and structural panel prices, as well as market activity for all major producing regions of the U.S. and Canada. In its Feb. 27 newsletter, the Random Lengths lumber composite index reported a price of $197/mbf, continuing a steady drop since a peak price of $473/mbf in August 2004.

“The prices are historically low, even without adjusting for inflation,” says Shawn Church, editor of Random Lengths. “They are numbers that many traders would never have thought would have been possible a few years ago.”

In an attempt to look for some positive news, Church was asked if he saw any indication that prices may have bottomed out.

“Not at this point. I think there’s some hope that there will be some seasonal uptick in activity, but there’s not a lot of grand optimism out there about 2009,” he says. “The lumber markets are reflecting the depressed housing market, which is at depressed levels with little in the near term indicating recovery.”

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— Brian Caldwell

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