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Lumber Slumps to Seven-month Lows As Housing Market Bears Brunt of Rate Hikes

Daniel

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Lumber futures have fallen to levels not seen since November, in a stark reversal from all-time highs set last year during the COVID-fueled homebuilding boom.

Chicago lumber futures (LB1:COM) for July delivery fell on Wednesday by the exchange maximum $49, or -7.5% to $604.50 per 1,000 board feet, extending this year’s slump to 46% and nearly two-thirds below the peak of $1,733 per $1,000 board feet from about a year ago.

ETFs: (NYSEARCA:XHB), (NASDAQ:WOOD), (CUT), (NAIL)

Potentially relevant tickers include (WY), (WFG), (LPX), (PCH), (RFP), (OTCPK:CFPZF), (OTCPK:IFSPF), (OTCPK:WFSTF)

“Lumber markets are probing for a floor,” Kevin Mason, managing director of ERA Forest Products Research, told Bloomberg, citing plunging home sales and higher interest rates, adding lumber prices may fall to $400 per 1,000 board feet in the next two months before producers curb production to remove excess supply.

Sales of newly built homes plunged 16.6% in April from March to the lowest level since April 2020, at the height of the COVID lockdowns in the U.S., and the biggest drop in nine years.

Lumber buyers have slowed orders and wood is piling up at mills, which are weighing on prices, pricing service Random Lengths said, according to The Wall Street Journal.

But barring a recession, Matthew Saunders of John Burns Real Estate Consulting told WSJ that he does not expect lumber prices to fall all the way back to pre-COVID levels, which rarely exceeded $500 per 1,000 board feet, due to the many problems in Canada’s western forests, where mills have struggled with fires, floods, high prices and hard-to-get timber.

Canfor (OTCPK:CFPZF) said last week that its Canadian sawmills have been operating at ~80% of production capacity since late March, and will continue reduced operating schedules due to ongoing global supply chain challenges.

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Original Article: seekingalpha.com

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Hot Stocks: BIDU Leads Chinese Tech Stocks Higher; PTON, ODFL Rise on Earnings; SNAP Drops

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Stocks surged in the wake of the Federal Reserve’s latest interest rate announcement, with the Nasdaq ending Wednesday’s session higher by 2%. Investors focused on comments from Fed Chair Jerome Powell suggesting that the central bank was starting to make progress in its fight against inflation.

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Article: seekingalpha.com

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U.S. Beginning to Detain Some Chinese Aluminum Imports, Top Shipper Says

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The U.S. has started to detain imports of aluminum products suspected of being made through forced labor, particularly from China’s Xinjiang region, shipper A.P. Moller-Maersk (OTCPK:AMKBY) said Tuesday, according to Bloomberg.

U.S. Customs has begun issuing “detention notices” for such products, the shipper said in an advisory, adding the action probably would target aluminum used in automotive parts.

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Original Article: seekingalpha.com

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Gas Stove Controversy Heats up Again As Second U.S. Agency Proposes Limits

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Gas stoves are coming under renewed scrutiny as the U.S. Department of Energy published a proposal Wednesday for new regulations for the appliances, some of which have never been subject to federal efficiency standards.

The proposed rule-making would set new efficiency standards for both electric and gas cooking tops, preventing them from exceeding set levels of energy use per year.

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Original Source: seekingalpha.com

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