FX.co ★ Lumber Nears 3-Month Low

Lumber prices dropped below $580 per thousand board feet, approaching a three-month low as softer US housing demand and ongoing trade uncertainty weighed on the market. Although Canadian softwood lumber was excluded from the new 50% US tariffs, it remains subject to existing duties of nearly 35%, squeezing producers’ margins.

The Forest Products Association of Canada said these trade measures delivered an additional setback to an industry already running below capacity amid production curtailments and mill closures, even as Ottawa has extended support programs. The US Lumber Coalition, for its part, argued that Canada’s surplus production capacity continues to distort market dynamics.

At the same time, mortgage rates rose to their highest level in a year, according to Freddie Mac, while mortgage applications declined in the final weeks of July, signaling weakening homebuying activity. Demand for lumber was further constrained by softer construction spending on lumber-intensive single-family housing, which fell 3.3% year-on-year in June.