FX.co ★ Lumber Rises Amid Looming Tariffs

In mid-October, lumber futures surpassed $610 per thousand board feet, nearing their monthly peak due to anticipated tighter immediate supply conditions and upcoming trade restrictions. As per the recently announced US Section 232 tariffs, which took effect on October 14, a 10% duty is now imposed on imported softwood lumber, while finished wood products like cabinets and furniture face increased tariffs. This development has spurred importers to accelerate orders and reduce inventory levels. Meanwhile, domestic production remains restricted; sawmills are operating with caution following years of insufficient investment, logging restrictions in environmentally sensitive areas, and sluggish capacity reactivation, all contributing to limited production capabilities. The challenges associated with switching suppliers are significant, especially considering that Canadian lumber, a major supplier to the US, is already subject to high antidumping and countervailing duties, exacerbating the supply constraints.