Lumber prices, which surged 44 percent in 2012, may extend the rally as the U.S. housing recovery gains traction, said Garrett Soden, the chief executive officer of RusForest AB, a Swedish forestry company.
“Housing starts are still well below the historical average,” Soden said in an interview in New York. “There’s room for demand to increase, and the market is well-placed for prices to increase.”
New-home construction probably climbed 3.4 percent to an 890,000 annual rate in December, the fastest since July 2008, according to a Bloomberg survey before a Commerce Department report tomorrow. In the past 10 years, starts averaged 1.26 million, based on government data.
A beetle infestation and reduced sawmill capacity pared lumber supplies in North America. Price gains may spread to other regions because of production cuts in Europe, Soden said.
On Dec. 26, lumber futures on the Chicago Mercantile Exchange. reached $399.50 per 1,000 board feet, the highest since April 2005. Among the 24 raw materials in the Standard & Poor’s GSCI Spot Index, wheat posted the biggest gain last year at 19 percent.
Stockholm-based RusForest, which harvests timber and runs sawmills in Russia, said last month that it would sell SEK 86 million ($13.2 million) of new shares to its existing shareholders and SEK 100 million shares of new stock to Russian investment company Nova Capital as part of a restructuring.
Lumber futures for March delivery rose 0.2 percent to $377.90 at 8:40 a.m. in Chicago.