Wood plummets 60% amid historic commodities rally

Raw materials are going through a moment of unstoppable increases. With the supply crisis and the price of transport soaring, the purchase of products such as iron, gold, cotton, wheat?? etc, it has become more expensive than ever. However, there is a product that has not only escaped the widespread increases, but is experiencing an unprecedented collapse that contrasts with the general direction: wood.

In recent months, it has decreased by more than 60% and volatility is maximum . Although this does not mean that it is cheaper than ever. This setback is a consequence of the unprecedented boom that had experienced in the first part of the year, being the only raw material caught in a historical upward spiral that managed to shoot the price up to 400% from the lows of 2020.

In 2021 there was a break in the global stock of wood due to the fact that the United States logging companies stopped their production before the widespread fear of running out of too much inventoryand that there were few orders. However, what happened was radically contrary to their forecasts, the market demanded wood more than ever. So, with scarce supply and very high demand, prices started a historic rally that has now caused them to go against the current with the rest of raw materials.

This is explained by Quant, the consulting firm specializing in raw materials. “The boom in housing construction and reforms” has led to “an increase in prices to record highs.” However, they clarify that “once this alteration is compensated , the return to normality has led us to a reduction in prices to levels more in line with the current market situation. “The Spanish Association of Trade and Wood Industry also alluded as factors of this situation to the increase in Chinese demand , which has soared.

A situation that has created problems for industries that require wood but has made sawmills around the world gold. In Spain, the production in areas such as Galicia or La RiojaIt has been reinforced by very high prices that have made the companies that dominate the sector increase their profits significantly.

“There will be an increase” but very different from the rest of raw materials

In this sense, experts hope that the high volatility that this resource has starred in will gradually decrease. “There will be a better match between supply and demand “And, most likely, it will follow the general course and” there will be more prices. “However, they explain that this rise will be very different and much smoother (or there will even be possible drops) because the indices related to housing construction continue to rise. .

And while wood is experiencing this decline, raw materials are trapped in increases never seen before. The copper soars 30% this 2021 and the aluminum 57%. Other metals like e nickel accumulate a rise of 20%. Oil, for its part, has a 40% revaluationand is at the highs of 2018, with a year-on-year increase of 87%.