Lumber futures climbed to $630 per thousand board feet in mid-October, marking a two-month high. This increase comes as the market adjusts to the newly enacted US Section 232 tariffs, which went into effect on October 14th. The tariffs impose a 10% duty on imported softwood lumber and higher levies on finished wood products. Consequently, importers have accelerated orders and reduced inventories to mitigate cost impacts.
The domestic production landscape is also tight. Sawmills are proceeding with caution due to years of underinvestment, logging restrictions in sensitive regions, and the slow pace of capacity restarts, which has removed tens of millions of board feet from the immediate supply chain.
Additionally, Canadian lumber—which accounts for a substantial segment of US demand—endures heightened antidumping and countervailing duties, exacerbating the current supply constraints. Meanwhile, the expectation of lower US interest rates has further fueled the rally. Lower borrowing and financing costs could potentially revitalize housing activity, contributing to the current market dynamics.
