FX.co ★ Lumber Drops Toward $560

Lumber futures have declined to approximately $560 per thousand board feet due to declining demand and abundant supply. In the United States, housing starts experienced a significant drop of 8.5% in August, reaching a seasonally adjusted annual rate of 1.307 million. Building permits also decreased by 3.7% to 1.312 million, marking the lowest levels since mid-2020 and falling short of forecasts. This indicates a potential slowdown in future construction activities. Moreover, earlier tariff adjustments and increased U.S. duties on Canadian softwood lumber led to advanced shipments and stockpiling, resulting in a surplus inventory that is now being addressed. In response, producers have started reducing output, with Interfor announcing a cutback of approximately 12% at several mills. Although mortgage rates have slightly decreased recently, they remain significantly higher compared to pre-pandemic levels, affecting affordability and hindering any immediate rebound in demand.