FX.co ★ Lumber Drops to 1-Month Low

Lumber futures have declined to $600 per thousand board feet, hitting a one-month low as the peak building season slows. This is largely due to high financing costs, with 30-year US mortgage rates hovering near 7%, and rising trade tensions with the US. On the supply side, North American sawmills are operating at around 80% capacity to avoid excess inventory, a strategic move that supports Western SPF prices even as order volumes soften. Additionally, anticipated US tariffs on Canadian softwood, which could increase from approximately 14% to more than 34%, have prompted builders and distributors to stockpile ahead of the tariffs, temporarily stabilizing prices. Nonetheless, reduced housing demand and increased carrying costs appear to have a greater impact than inventory replenishment, leaving the market finely balanced between supply constraints and decreased consumption.