However, some analysts are also skeptical about the sharp fall in timber prices in an extremely inflationary environment. While lumber prices have started to slide lower, it will take time for those falls to reach end users, says another US analyst.
He believes that the fall in demand or the rise in supply will have to continue for some time before price cuts occur further down the pipeline. But futures market prices are likely to fall even further as investors and consumers realize production will pick up again, the analyst says.
Despite all the bearish signals, current demand is still relatively robust, so there is no compelling reason for producers to cut prices quickly and significantly. That only happens when they actually see a drop in orders. In view of the development described above, however, this can happen faster than many people think.
However, the global crisis in the supply chain has also had a significant impact on international timber trade and timber prices in recent quarters. International timber traders therefore assume that the problems in the supply chain will continue for at least a few months. The war in Ukraine and the export embargo against Russia, which also affects wood, actually tend to counteract a rapid fall in prices.