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  • Demand from China results in higher timber futures

    2012 - 03.16

    Demand from China has ensured that lumber futures have reached a ten-month high in February.

    The latest Wood Resources international report shows that lumber futures have outperformed all other commodities, with prices gaining 11 per cent in February alone.

    Analysts believe that timber could reach prices of $300 per 1,000 board feet by mid-summer. At the moment, it is hovering around $275.20 on the Chicago Mercantile Exchange.

    The major strength behind timber prices seems to be the demand from China, which shows no sign of abating, and, if anything, should grow even further, claim analysts. West Fraser Timber Co, which is the largest lumber producer in the US said that the amount of timber being shipped to China “picked up substantially” between the final quarter of 2011 and the first quarter of 2011 so far.

    Meanwhile, timber investors, such as those who have invested in plantation land through Greenwood Management’s Brazilian projects, will also be happy to hear the good news straight from the horse’s mouth. Hakan Ekstrom, the President of Wood Resources International, said that the US housing market will also start to increase demand for timber. He told Bloomberg: “The general trend should be upward, with more optimism in the market that housing starts should slowly start to increase.”

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