The negative change in market conditions last year was influenced by several events. The main problem is that the raw material market has been subjected to a rush of demand. The latter has mainly appeared in countries such as the U.S. and China, as well as in Australia. The reason for this can be attributed to the disruption in raw material supply chains due to the spread of coronavirus infection, leading to a pent-up surge in demand from consumers for raw materials (Flynn Jay, 2022). In addition, the cost of raw materials for finishing materials rose in the post-covid period in the absence of a significant number of offers from manufacturers. In turn, sellers increased prices in order to maximize profits. The period described is the events of late October 2020 through all of 2021.
In early 2022, lumber prices in countries such as China and the U.S. were boosted by an increase in consumer demand. According to experts, price stabilization should be expected by the beginning of the construction period. The price increase had a positive effect on the timber business, making it highly profitable. With the extra profits, the plants were able to upgrade their equipment and buy new machines. Most likely, the price level in the international market this year will not be lower than in 2021, but the rate of price growth will be low (Flynn Jay, 2022). Until the pre-coronavirus supply chains are restored, no price drop should be expected. During the first six months of 2022, prices for lumber products and round timber will fall due to the growth of production by wood processing companies (Flynn Jay, 2022). A downward trend has already emerged in November-December 2021.
Work Cited
Flynn Jay, Erin. “Why Lumber Prices Are Sky High—Again.” The Bluebeam Blog, Web.