Shares of Federal Way, Washington-based Weyerhaeuser, which also manages timberland in Uruguay, rose 9.1% to $30.35 since the start of January, extending last year’s 49% advance. Those of Vancouver-based Ainsworth Lumber added 41% to C$3.87 and will reach C$4.94 in 12 months, the average of four estimates shows.
A 2,400-square-foot home in the U.S. typically uses about 14,400 board feet of softwood lumber, according to the Washington-based National Association of Home Builders. Sales of new single-family properties advanced 1.5% in March, completing the industry’s best quarter since 2008, Commerce Department data show. Housing starts climbed to a 1.04 million annual rate last month, also the fastest since 2008.
The surge in lumber prices is increasing costs for construction companies. Toll Brothers Inc., the largest U.S. luxury-home builder, paid about $3,000 more per home in material and labor costs in its fiscal first quarter ended Jan. 31. Lumber accounted for $2,000 of the increase, Chief Executive Officer Douglas Yearley told a conference March 4.
North American lumber exports to China surged 17-fold to 3.5 billion board feet since 2006, according to International Wood Markets Group. The nation of 1.35 billion people, which builds as many as 15 million mostly multi-story houses a year, mostly uses lumber for scaffolding, pouring concrete and forming bricks, according to International Wood Markets’ Van Leeuwen.
While China’s economy is accelerating again after two years of slowing growth, the 8% expansion projected for this year by economists surveyed by Bloomberg would be the second- weakest in the past decade. Thirty-five city governments issued details of property curbs by April 1, a month after former Premier Wen Jiabao raised down-payment requirements for second mortgages in some cities and told local governments with the biggest price increases to tighten home-purchase limits.
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