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<ul class="summary-list"><li>Historically high <keyword id="11949066" type="UNKNOWN" weightage="60" keywordseo="lumber-prices" source="Orion">lumber prices</keyword> are driving earnings for companies that make faux-wood decks, CNBC first reported. </li><li><a href="https://markets.businessinsider.com/stock/TREX">Trex</a> and <a href="https://markets.businessinsider.com/stock/AZEK">Azek,</a> are up 36% and 10%, respectively, year-to-date. </li><li>The companies both crushed earnings in the most recent quarter.</li></ul>Soaring <a href="https://markets.businessinsider.com/commodities/lumber-price?utm_source=markets&amp;utm_medium=ingestgest">lumber prices</a> throughout the pandemic prompted some buyers to seek alternative building materials, and the stock prices of faux-wood producers have soared as a result. <a href="https://markets.businessinsider.com/stock/TREX">Trex</a> and <a href="https://markets.businessinsider.com/stock/AZEK">Azek</a> are both producers of "fake-wood decks," and have seen their stock prices and sales boom during the pandemic amid high lumber prices, according to a <a href="https://www.cnbc.com/video/2021/09/03/why-fake-wood-decks-are-booming.html">report from CNBC. </a>The companies produce decks that look like they are made of wood, but actually consist of materials including plastic, fiber, sawdust, and wood. The two companies control about 75% of the composite decking market, which is in turn about 20% of the entire $8 billion decking market, CNBC said.Winchester, Virginia-based <keyword id="12021044" type="UNKNOWN" weightage="60" keywordseo="trex" source="Orion">Trex</keyword> grew sales 41% year-over-year in the second quarter of 2021, totaling $312 million. In the company's earnings report, the CEO attributed the quarter's success to sustained demand and market share gains from lumber.Shares of Trex have gained 36% in 2021 alone, far outpacing the S&amp;P 500's 20% rise. The faux-wood deck producer has jumped 55% since October 2020, when lumber began its surge.Stock in Chicago based-Azek has gained about 20% since October 2020, and is up 10% year-to-date. In the company's third fiscal quarter it increased consolidated net sales 46.4% year-over-year to $327.5 million. The company went public in June 2020 and is up 56% since then.Meanwhile, lumber is down 17% year to date, and has <a href="https://markets.businessinsider.com/news/commodities/lumber-price-today-now-commodity-sawmill-housing-market-homebuilding-delta-2021-08">fallen nearly 70% from it's all-time high in May</a> as supply and demand forces begin to even out.According to CNBC, the success of the fake-wood deck company's isn't only attributed to high lumber prices, but also to a broader shift in consumer preferences. Some consumers believe faux-wood decks are more affordable in the long-term because they last longer than wood decks in outdoor conditions.

Lumber's pandemic rally has spilled over into fake alternatives, sending shares of faux-wood companies soaring

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Lumber's pandemic rally has spilled over into fake alternatives, sending shares of faux-wood companies soaring

Emily Graffeo

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