Irrational behavior by buyers confidently betting on being able to pass on that irrationality to their customers. It works until it doesn’t.
Lumber futures on Chicago Mercantile Exchange currently trade at a record high of $1,610 per thousand board feet, having quadrupled since February 2020, just before the Pandemic, a sign of scary-crazy inflation amid suddenly blistering demand from builders, insufficient supply to meet that sudden surge in demand, growing lead times, and irrational behavior by buyers betting on being able to pass on that irrationality via higher prices to their customers (chart via Trading Economics):
Here’s another boots-on-the-ground observation being passed around about this scary-crazy inflation, triggering irrational behavior by buyers betting on being able to pass on that irrational behavior to their customers.
And these are the pros, not consumers.
A local electrician with a shop in Idaho near Moscow (where the University of Idaho is) was talking with one of the house builders he does work for. And this is the story he passed on to WOLF STREET:
“Moscow Building Supply (MBS) is the big building wholesaler in Latah County – last summer, you could buy a sheet of OSB [Oriented Strand Board, a type of plywood] at about $12 a sheet (4×8). Last week, $50 a sheet.
“A couple days ago, MBS got a truck load of OSB. A big home builder in Spokane drove down to MSB and bought the entire truck load – even before it was unloaded – for $80 a sheet.
“The next load is scheduled in two weeks. MBS is now telling customers to expect to pay $105 a sheet.
“Also plastic piping, such as 3-inch PVC pipe, commonly used by electricians as conduit. Last fall, my son paid 12 cents a foot. Now it is going for $5 a foot.
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