FX.co ★ Lumber Falls to Nine-Month Low

Lumber futures fell below $550 per thousand board feet, their lowest level in nine months, as elevated borrowing costs continued to dampen demand. The US housing market remains constrained, with mortgage rates hovering near their highest levels in more than a year and showing no sign of easing following the Federal Reserve’s latest policy rate hike. This has further weighed on demand from prospective homebuyers.

Building permits declined 2.7% on the month, although a 7.6% increase in lumber-intensive single-family housing starts in August provided some offsetting support. At the same time, US–Canada trade negotiations broke down, heightening concerns over future lumber supply. In response to US tariffs on several lumber-related products, Ottawa announced counter-tariffs of 25% on US lumber and 50% on plywood.

US forestry groups have long accused Canada of distorting the lumber market, pointing out that 94% of Canadian forestland is publicly owned—compared with 58% privately owned in the US—an arrangement they say enables Canadian producers to sell lumber at lower prices.