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Cashing in on Commodities: Lumber & Paper Mills Struggle as Timber Stands Tall
There’s a classic squeeze going on in the timber markets right now.
As you might expect, the U.S housing slump is reducing demand for finished lumber. Meanwhile, timber, pulpwood, and paper prices are rising worldwide – but curiously, profit margins are eroding.
What’s up with that?
The global commodity boom has created a supply/demand price imbalance between the four distinct industry sectors that rely on timber as a raw material. In fact, that imbalance is a huge mismatch. And savvy investors may be able to wring substantial returns from the winner.
You see, timber companies have shrewdly maintained monopoly-like control of…
26May2008 | Money Morning | Comments Off | Continued
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