Lumber prices are rising in the U.S. because of greater demand in Asia, which is a sign of recovery in the international real estate market. The exchange-traded fund for lumber, Claymore Beacon Global Timber Index, has climbed more than 5.22% in market action for the month.
According to U.S. Forest Service data, log exports grew by 5.2% in the first quarter of 2012, mirroring the most recent increase in CUT. Research entity the RISI International Wood Markets Group reports that overseas lumber shipments more than doubled from 2001 to 2008. Over the past two years, demand from China has fueled much of the increase in timber exports. The lumber industry is very closely tied to the housing market in the international real estate sector.
Lumber is used in every stage of a house. In the construction phase, lumber is needed for framing, cabinets, furniture, flooring and railings. Later, timber is important in remodeling projects, which can range from adding rooms to installing a deck. Lumber products are also required for many repairs.