The global lumber market is being pulled in two opposing directions. On paper, rising tariffs, supply reductions and higher logistics costs should be supporting prices. In practice, full inventories and weak construction activity are doing the opposite.<\/p>\n
In the United States, lumber futures have fallen to around $566 per 1,000 board feet, the lowest level since March. Market sentiment remains fragile, shaped by ongoing trade tensions and policy uncertainty. Washington has moved to impose provisional anti-dumping and countervailing duties on Canadian softwood lumber. Combined with an existing 10% tariff, total duties are expected to reach roughly 35.9% when the new measures take effect in August.<\/p>\n
Yet these protections have not translated into stronger pricing. Sawmill utilisation in the US is running at about 64%, according to Tradingeconomics, reflecting subdued demand rather than constrained supply. Construction activity continues to weaken on both sides of the Atlantic as developers contend with rising costs and elevated interest rates. Confidence among US homebuilders has dropped to its lowest level since September 2025.<\/p>\n
The slowdown in housing starts has left lumber traders holding large volumes of seasonal stock. With construction sites quieter than usual, many have been forced to offer significant discounts simply to clear space in their yards.<\/p>\n
Currency dynamics are adding another layer of pressure. A stronger US dollar is making exports less competitive while increasing the relative cost of domestic production. At the same time, the conflict in the Middle East and rising energy prices are feeding into expectations of higher input costs across the building materials sector.<\/p>\n
Supply tightening fails to lift prices<\/strong><\/p>\n On the supply side, developments would normally point toward a tighter market. Sawmill closures in the US and Canada, along with higher duties on Canadian imports, are expected to remove more than 1.3 billion board feet from North American supply, according to Tradingeconomics.<\/p>\n But the expected tightening has yet to materialise in pricing. Inventories remain elevated across the region. Production cuts in British Columbia are ongoing, yet storms in the southern United States have disrupted construction activity, further weakening demand. The result is a persistent surplus that continues to weigh on prices.<\/p>\n Trade policy has also produced unintended consequences. Tariffs introduced under the Trump administration, aimed at supporting domestic producers, have increased the average cost of building a home, dampening demand in the process. That, in turn, has eroded builder confidence at a time when stronger activity would be needed to absorb existing inventories.<\/p>\n Financing conditions are reinforcing the slowdown. Rates on 30-year fixed mortgages have risen to 6.22% after the Federal Reserve left its benchmark rate unchanged, keeping borrowing costs elevated for prospective buyers.<\/p>\n Meanwhile, a sharp rise in crude oil prices is feeding directly into higher transportation and production costs, both of which are energy-intensive in the lumber sector. For builders already facing slower sales, the response has been to cut prices in an effort to move unsold inventory and maintain cash flow.<\/p>\n Taken together, the market is caught in a familiar but difficult cycle: supply is tightening at the margin, but not fast enough to offset the drag from weak demand and high financing costs. Until that balance shifts, downward pressure on lumber prices is likely to persist.<\/p>","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":98562,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-98561","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n