Lumber, which at one point in May this year was up over 154% from its January lows, yesterday closed at $685, wiping out all its astonishing gains for the year. At the start of the year lumber was trading at $873 (that is 110k board feet) before dropping to $668, however from that point it took off, topping out at over $1,700 before the collapse.
Early in the pandemic both production and demand collapsed, with lumber trading at $264 in April last year. However, with the demand for housing increasing, along with people not having to go into the office, so they were able to do home renovation projects, prices started to move. In 2020 they topped out at over $900, before easing down to $500 in November.
The drop in lumber prices is amongst the best examples of the easing in commodity prices globally after we saw rallies in raw materials from corn to copper earlier this year, adding to the concern that soaring costs would undercut the economic recovery. U.S. Federal Reserve Chair Jerome Powell last month cited lumber’s decline as evidence that price pressures were cooling as supply bottlenecks from the reopening economy are worked out and stimulus fades.
Not that the price of anything is going to be a worry for ex-Prime Minister David Cameron these days. It was reported in the FT that the collapsed finance group Greensill Capital paid David Cameron a salary of over $1 million a year for his part time advisory role. Indeed, it was part time, just 25 days a year, which equates to Cameron earning $40k a day.
Seems the saying ‘It’s not what you know but who you know’ is more apt than ever in certain circles.