Lumber prices continue to climb, bolstering sawmill owners and timber sector-related exchange traded funds.
Year-to-date, the iShares Global Timber & Forestry ETF (WOOD)has increased 15.3%, while the Invesco MSCI Global Timber ETF (CUT)has gained 13.8%.
While wood prices grew into record territory last week, sawmill owners in the timber industry like Weyerhaeuser Co. and Canfor Corp. are expected to generate even larger profits than the record earnings they have been reporting for the first three months of 2021, the Wall Street Journal reports.
Sawmills have become the biggest beneficiaries of the wood market rally. The companies are capitalizing on a glut of cheap pine trees in the U.S. South. Meanwhile, demand for finished products like lumber and plywood has surged amid the recent boom in the housing market and refurbishing business.
Builders are reporting record home sales, and theyre going to need that wood to build those homes, Eric Cremers, chief executive of PotlatchDeltic Corp., said.