The Lumber prices refers to US Lumber. The Lumber there are mainly Spruce Pinewood which are plantation logs.In Malaysia (Sabah/Sarawak)the Timber are from Natural Forest.The main spp are Meranti, Kuring & Kapor often refers to South Sea Logs. The main buyers are Japan and India. The prices are nowhere near to USD 1,600.00.The info is totally erroneous.
For Malaysian logs Govt impose restrictions on log exports for the purpose of value add in down stream saw timber and plywood processing
Prices of Logs & plywood export to India & Japan have not yet play catch-up as in the US yet but time will come as our world is small. So it is a matter of time
You must remember that even in the US the entire lumber industry was in a range bound price of around USD200 only for a 20 year long perion
Read again
As you can see in the chart below, lumber prices have moved mostly sideways over the past 20 years. We saw a big spike last year, though, and prices have remained higher. These increased prices are leading to higher sales and should help lumber companies grow.
Read one more time in BOLD PRINT
"AS YOU CAN SEE IN THE CHART BELOW, LUMBER PRICES HAVE MOVED MOSTLY SIDEWAYS OVER THE PAST 20 YEARS"
THEN?
WE SAW A BIG SPIKE LAST YEAR, THOUGH, AND PRICES HAVE REMAINED HIGHER.
Why the change?
IT IS DUE TO COVID 19 LOCK-DOWN AND THE NEW DYMANIC CHANGE OF WORKING FROM OFFICE TO WORKING FROM HOME (OFFICE)
Now since only in USA there is a titanic shift of Lumber & Plywood demand (of course they will use soft wood first) When Soft wood prices fly up the sky hard work (if still so cheap) will be the alternate wood by default
Same co realtion happen to Palm oil & soybean oil
Palm oil has been in the doldrum since 2015 to 2020 for 5 years after the 2012 - 2014 price spike. It was the rise of Soybean oil that pulled up Cpo prices in tandem
So is the export of Wood Products to USA especially plywood now
And in Jtiasa website they mentioned USA is one of their export markets. TSH through Ecowood also export to the USA. And Eksons export plywood directly to the US
So look for Timber companies that have a direct or indirect exposure to America best.
FOR 20 YEARS LUMBER PRICES RANGE BOUND FROM USD160 TO USD240 ONLY
Why then Lumber prices are surging up?
Answer: Due to Covid 19 lock-down there is a Titanic shift from working in expensive city to less pricey suburb which unlock cash for renovation & addition of more space for "office" in home
In time past 50 to 100 people go to work in an office. Now they work from home - so there will sprung up 50 to 100 new "Home office" THIS WILL CAUSE THE NEED FOR LUMBER LIKE NEVER BEFORE
IS THIS A PERMANENT STUCTURAL CHANGE OF SOCIAL BEHAVIOUR OR THE NEW NORMAL?
I do not understand why you fwd prices of US Lumber when you're refering to Malaysia Timber companies. The picture you fwd is rosy for those counters like Taan, WTK, Jaya Tiasa etc....Not only US Lumber Prices has no relevance here, I also defer from your rosy picture of these companies. Sarawak Govt has changed policy ( cant remember how many yrs ago). B4 export of logs is 50% of production. This is more lucrative than selling local. It has since reduce to 20% a major set back. This not the end, local Cess was at the same time increased by 400%. The downstream activities are suffering financially. Sarawak timber has been over harvested and now has great problems with resources to fullfill their eg plywood mills. These cos' can stay afloat bec their Oil Palm Plantation are covering their Timber Operation. The days of export log prices of USD 300+ pcm is long gone, USD250/270 is the new norm.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
VenFx
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Posted by VenFx > 2021-05-17 17:42 | Report Abuse
I like most Calvin sifu s articles recently.
Very informative