Lumber prices are continuing to surge amid Russia’s invasion of Ukraine, and traders could soon see even bigger price swings. Source: Business Insider
Futures have been on a wild ride since the onset of the COVID-19 pandemic, and they soared to a record high of US$1,711 per thousand board feet last May. After tumbling through the spring and summer, they have been rebounding and got a fresh jolt from Russia’s war. Since Vladimir Putin ordered troops into Ukraine, prices have jumped 14% to US$1,452, putting them just 15% below the all-time peak.
The war in Ukraine has “just aggravated the bull market we have in commodities,” said David Russell, VP of market intelligence at online broker-dealer TradeStation. “With the bull market in commodities like oil and a lot of metals that we’ve been seeing, that only gives extra support to something like lumber.”
Western sanctions in response to the invasion are hammering Russia’s economy, and political pressure is building up for more.
US Representative Victoria Spartz, a Ukraine-born Republican from Indiana, told Fox Business that the West should target Russia’s markets for lumber and energy to stop its attacks.
Such sanctions could rattle lumber prices further. Russia is the largest lumber exporter in the world, and its forest-product exports were worth more than US$12 billion last year, said trade journal Canadian Forest Industries, which cited data from Wood Resource Quarterly.
