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Lumber shows signs of revival. Positive sign for the housing sector

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Lumber continues to rise, with the price successfully knocking out the 200-year daily for the first since 2018. Perhaps we will see a recovery in the price of wood. Throughout 2018, this resource was suppressed by signs of slowdown in the US housing sector. It is the declining number of construction of new houses that has led to weak demand, which has depressed prices in the long run.

Although with some signs of stagnation, the housing sector is on the brink of its limit, ie. is entering the peak of this economic cycle. The expected increase in construction will boost the price of wood, but it will raise the question whether this price increase will be correlated with reaching the peak of economic activity in the construction sector. As we know, after all the economic upturn, there is a peak, and after each peak there is a delay, and after each delay ... a tumbling collapse.

Graphs: Used with permission of Bloomberg Finance L.P.


 Jr Trader Martin Nikolov

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