FX.co ★ Lumber Rises Past $650

Lumber futures have surged beyond $650 per thousand board feet, nearing their peak levels last observed in April. This rise is attributed to a decrease in US sawmill output and a reduction in import volumes, both of which have dropped to their lowest in nearly five years. In the first quarter, domestic production recorded a year-on-year decline, while imports, particularly of softwood lumber from Canada, have sharply decreased. As a result, the availability of framing materials in the US is now at its scarcest since 2019. Concurrently, builders are facing the prospect of rising tariffs that could increase duties on Canadian lumber from the current rate of approximately 14.5% to levels in the mid-30s, potentially adding thousands to the cost of new homes. Despite a slight dip in construction activity that has tempered recent price gains, demand overall remains strong enough to absorb the available supply. However, without a swift growth in US mill capacity or securing new supply sources, these supply limitations, coupled with increasing trade barriers, are expected to continue exerting upward pressure on lumber prices in the coming months.