Hurricane preparations seeing higher plywood prices
Wednesday, September 1, 2004 8:19:13 PM
NEW YORK (AFX) -- Though Hurricane Frances is still days away from potential landfall in the southeastern United States, those without window shutters are busy boarding up their houses with plywood -- if they can find any
Adding to the rush to get protective paneling is the extra price customers will pay, thanks to an extended home-construction boom and wet weather that have driven up lumber costs
Housing starts rebounded in July, rising 8.3 percent over June and are also up 18.6 percent on an annual basis over their second-quarter average
Building permits, a leading indicator of the housing market, increased 5.7 percent to a seasonally adjusted annual rate of 2.055 million in July from June's 1.945 million. The home construction boom has helped lumber suppliers raise prices, but there has been no severe disruption in overall supply, according to analysts
Lumber prices climbed higher by 10 percent in August, said J.P. Morgan analyst Claudia Shank. "It was a similar story for Southern plywood prices," which rose by an average of $96 per thousand square feet, a 30 percent increase month over month, Shank wrote in a research note Tuesday
Home improvement chains Home Depot and Lowe's , with stores in the path of the latest storm -- coming just three weeks after Hurricane Charley ravaged western Florida -- are seeing shortages, according to local media reports
Home Depot said its stores in Florida were seeing the early stages of hurricane preparation as plywood sheeting and lumber were selling quickly, along with batteries, generators and flashlights
"When you come off one hurricane and go into another," demand can spike, with some customers ready "to buy the product right off the truck as soon as it comes," added Paul Raines, vice president of operations for Home Depot's roughly 130 Florida stores. The National Hurricane Center said Wednesday that Frances had advanced to a Category 4 storm, with sustained winds of 140 mph, and could possibly strengthen. Its projected path over the next five days was a wide swath of coastline from Miami to South Carolina
About 80 stores were in the projected sweep of Frances, Raines said, and they were "maintaining a pretty healthy supply level." Both companies purchase lumber on long-term contracts and said prices are affected more by industry supply than by hurricanes
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