The US lumber market entered September with demand still restrained, sawmills reacting more quickly to weak order books and imported European wood arriving into less favourable conditions than when it was purchased. Log exports, mill curtailments, wildfire damage and the loss of pulp capacity are changing the supply side of the market, while benchmark lumber prices have remained more stable than operating conditions might suggest.<\/p>\n
1. Sawmills are responding faster to weak demand<\/strong><\/p>\n North American producers have become considerably quicker to adjust output when sales slow. Temporary curtailments, maintenance downtime and permanent closures continued to be announced during August, keeping production closer to confirmed demand and preventing unsold lumber from accumulating at mills.<\/p>\n This represents a change from previous market cycles, when sawmills often continued producing at a loss in the expectation that housing construction would recover within several weeks. The resulting excess inventories frequently caused a deeper price decline across the industry.<\/p>\n Curtailing a sawmill remains expensive, and restarting production brings its own labour and operational costs. Nevertheless, many producers now prefer a temporary reduction to manufacturing lumber without a buyer. Mills are protecting cash and avoiding the inventory costs associated with carrying unsold products into the final months of the year.<\/p>\n The approach has helped prevent a broader collapse in lumber prices despite low capacity utilisation in both Canada and the United States. Many mills are generating only narrow margins, but disciplined production has kept the market from returning to the widespread loss-making conditions recorded during earlier downturns.<\/p>\n This discipline will be tested after Labor Day. Buyers returning from the summer break are expected to assess existing inventories before placing orders, while mills will have to decide whether to restore production or maintain reduced schedules through September.<\/p>\n 2. US log exports conflict with efforts to increase domestic lumber production<\/strong><\/p>\n US log exports increased by approximately 15% year-on-year during the first half of 2026, even as trade policy continued to favour greater domestic lumber production and reduced reliance on Canadian supply.<\/p>\n For private timber owners, the decision can be straightforward. Exporting logs may provide a faster or higher return than selling to a domestic sawmill facing weak lumber prices, high energy costs and reduced operating schedules. For US industrial policy, however, the trend creates an obvious contradiction.<\/p>\n Canadian lumber is subject to higher duties intended to improve the competitive position of US producers. At the same time, part of the American raw-material base is being shipped abroad without undergoing domestic processing.<\/p>\n Canada recorded the opposite movement during the first six months of the year. Its total log exports declined by around 8%, while shipments to the United States fell by approximately one-third. Canadian exports to China, however, increased by close to 19%.<\/p>\n Different forest ownership structures influence these movements. Most Canadian timber is publicly owned and administered by provincial governments. A large share of US timberland is privately held, allowing owners to choose between domestic mills and overseas buyers according to the available return.<\/p>\n The result is an increasingly uneven regional market. Some US sawmills may face competition from exporters for suitable logs, while mills in areas affected by pulp and paper closures operate in regions where timber growth already exceeds industrial demand.<\/p>\n 3. Pulp mill closures are weakening sawmill economics<\/strong><\/p>\n The viability of a sawmill does not depend only on the difference between log and lumber prices. Producers also need reliable customers for chips, sawdust, bark and other material generated during processing.<\/p>\n Pulp and paper mills have traditionally absorbed a substantial share of sawmill residuals. Depending on the region, quality and transport distance, chips and sawdust can generate revenue of around US$80 per oven-dry metric tonne. This income can determine whether a mill remains profitable when lumber margins are narrow.<\/p>\n Recent pulp and paper mill closures have removed part of that demand. A sawmill may consequently face pressure on both sides of its operation: logs remain expensive or difficult to secure, while residual material becomes harder to sell.<\/p>\n Storing or disposing of residuals also creates additional costs. If the nearest remaining pulp mill is farther away, transport may absorb much of the material\u2019s value. A lumber mill can therefore become uneconomic even if benchmark lumber prices show only a moderate decline.<\/p>\n The relationship also works in the opposite direction. Sawmill curtailments reduce the supply of clean chips and sawdust available to pulp mills, pellet producers and panel manufacturers. A contraction in lumber production can tighten some fibre markets even when standing timber remains abundant.<\/p>\n This helps explain why sawmill closures and production cuts are continuing without a dramatic fall in headline lumber prices. The benchmark price covers only one part of a more complicated operating calculation.<\/p>\n 4. European lumber is arriving into a softer US market<\/strong><\/p>\n European softwood lumber ordered earlier in the year is reaching the US East Coast under less favourable conditions than importers anticipated. Cargoes were purchased when expectations for American construction demand were stronger and replacement costs were higher.<\/p>\n They are now entering a market characterised by cautious buying, short order files and competitive offers from domestic producers. Importers may have to hold the wood for longer, accept lower margins or discount part of their inventories before the end of the year.<\/p>\n The next 30\u201345 days will determine whether European shipments can remain at recent levels. The pressure is greatest for standard construction dimensions competing directly with Western SPF and Southern Yellow Pine. Special dimensions, grades or customer programmes may remain less exposed to spot-market weakness.<\/p>\n Exchange rates, ocean freight and duties on Canadian lumber continue to give European suppliers access to parts of the US market. Access does not guarantee profitability, however. Wood purchased against an earlier price structure can become difficult to sell when domestic mills lower offers and US distributors refuse to rebuild inventories.<\/p>\n The arrival of imported supply may also limit the size of any post-Labor Day increase. Even if American buyers return to the market, they will have more alternatives and little reason to accumulate large volumes unless construction activity improves.<\/p>\n 5. Prices remain stable, but Southern Yellow Pine has corrected sharply<\/strong><\/p>\n Benchmark lumber prices moved unevenly during the second half of August. Western SPF drifted lower, Eastern SPF remained comparatively firm, stud lumber weakened and Canadian softwood plywood recorded a limited increase.<\/p>\n Southern Yellow Pine experienced the largest correction. Producers attempted to push prices significantly higher during the summer, but buyers resisted through lower counteroffers or by withdrawing from the market. Once the increase failed, several products fell below the levels recorded before the rally began.<\/p>\n Some Southern Yellow Pine prices were below their early-January levels by the end of August. Mills subsequently reduced accumulations in several dimensions, which may limit further immediate losses without establishing a sustained recovery.<\/p>\n Lumber prices are in US dollars per thousand board feet. Canadian plywood prices are in Canadian dollars per thousand square feet. The ranges account for differences in mill location, freight, order size and delivery terms.<\/p>\n Western SPF remained close to US$480\/mbf, only moderately below its July level and slightly above the comparable period of 2025. Eastern SPF retained a substantial premium because of higher fibre, production and transport costs.<\/p>\n These levels do not indicate a strong market. They show that production cuts have so far prevented weak consumption from developing into a large surplus of lumber.<\/p>\n A substantial September rally appears unlikely. Buyers returning after Labor Day are expected to purchase selectively and continue carrying lean inventories. Further mill curtailments could support prices, but a durable increase would require a clearer recovery in US construction activity.<\/p>\n For the opening weeks of September, the more probable direction is narrow trading, product-specific discounting and continued differences between species and regions. Sawmill production decisions will remain at least as important as changes in demand.<\/p>","protected":false},"excerpt":{"rendered":" The US lumber market entered September with demand still restrained, sawmills reacting more quickly to weak order books and imported European wood arriving into less favourable conditions than when it was purchased. Log exports, mill curtailments, wildfire damage and the … Continue reading \n\n
\n \nProduct<\/th>\n Late-August level<\/th>\n Weekly movement<\/th>\n Monthly movement<\/th>\n<\/tr>\n<\/thead>\n \n Western SPF KD 2x4 No. 2&Btr<\/td>\n US$470\u2013490\/mbf<\/td>\n Down 1\u20133%<\/td>\n Down 3\u20136%<\/td>\n<\/tr>\n \n Southern Yellow Pine East 2x4<\/td>\n US$440\u2013460\/mbf<\/td>\n Down 1\u20133%<\/td>\n Down 12\u201316%<\/td>\n<\/tr>\n \n Eastern SPF KD 2x4 No. 2&Btr<\/td>\n US$625\u2013645\/mbf<\/td>\n Largely unchanged<\/td>\n Down 1\u20134%<\/td>\n<\/tr>\n \n Western SPF kiln-dried studs<\/td>\n US$465\u2013485\/mbf<\/td>\n Down 5\u20138%<\/td>\n Little changed<\/td>\n<\/tr>\n \n Coastal Douglas fir green 2x4<\/td>\n US$440\u2013460\/mbf<\/td>\n Largely unchanged<\/td>\n Down 6\u201310%<\/td>\n<\/tr>\n \n Canadian softwood plywood, 9.5 mm<\/td>\n C$695\u2013720\/msf<\/td>\n Up 0\u20132%<\/td>\n Up 0\u20133%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n