Talk of a pick-up in demand from China helps support US$1.40/mbf lift in January lumber futures to US$232.40/mbf; traders expect prices to firm as mills implement year-end production curtailments
December 9, 2011
– Speculation that customers in China may be looking for additional wood helped support a slight lift in January futures during Thursday's Chicago Mercantile Exchange trading, taking the nearby January contract $1.40 higher to $232.40 per thousand board ft (mbf).
Demand from China has slowed in recent weeks, but traders speculated that a pick-up in demand would take product off the domestic market and help to firm prices, Dow Jones reported on Dec. 8. Tighter supplies as mills take year-end curtailments could also strengthen prices.
Some traders assessed the risk that prices may increase and decided to exit short positions, lifting January, but March dropped $3.40 to $246.60/mbf. May settled up $0.80 at $262.80/mbf.
Cash prices were quoted in a $238-$250/mbf range.
The primary sources of this article are Dow Jones, Chicago, on Dec. 8, 2011 and daily settlement date for random lengths lumber futures from the Chicago Mercantile Exchange.