This article talks about the effect of the rebuilding efforts about to start in California on building supply prices. After Hurricane Katrina we saw an increase of the building supply costs because of the demand in effected region. An increase in price does not come as a surprise as you would expect an increase in demand to cause the price to raise.
In the article Jaren Patterick who is a framing division manager for the Utah division of BMC West which is a Boise-based building materials supplier said "The supply won't go down but prices will go up. They'll ride it for what it's worth. They're just like the oil industry, most producers of lumber and building supplies are looking for opportunities to raise prices."
Jaren seems to be showing a basic lack of understanding of supply and demand principles or else he just misstated what he meant. The price increase will not have anything to do with a change in supply but actually a change in demand. We can assume that the market is supplying lumber at the equilibrium quantity and that the market is currently buying at the equilibrium price. When the demand changes that will cause the price to increase. The market will adjust over time by either supplying more to meet increased demand, or the demand will drop as the rebuilding effort slows.
Jaren may have meant that the increase in demand because of the rebuilding would be so small that it really should not effect prices but that the suppliers will just increase prices because of a perceived increase in demand (or as he states decrease of supply).