Jun 23 2008 3:43PM | Permalink | Email this | Comments (0) |
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Don Magruder, vice president and general manager of Ro-Mac Lumber in Leesburg, Fla., told me recently that wood commodities have simmered down slightly from their robust price gains of recent weeks--but the pull back is slight and fuel surcharges are probably offsetting all of it. "Most companies, in the last 30 to 60 days, have added $2 to $5 per thousand in delivery charges, and dealer deliveries to jobsites are adding fuel surcharges in the range of 2 percent," Magruder says.
     In addition, Magruder warns that inventories remain very low in the supply chain. "Any supply chain interruptions or overwhelming demand could put enormous strain on dealers to supply products," he says. "All of the commodity markets are poised for a period of extreme volatility despite lower demand," Magruder cautions. "Builders should be extremely cautious about using today's prices to pro forma tomorrow's projects. Shingles have already begun an allocation process," he says, "and it's very easy to envision allocations for other products in the supply chain."