FX.co ★ Lumber Eases Toward $590

Lumber futures have recently hovered around $590 per thousand board feet, slightly retreating from the seven-week peak of $605 observed on May 19th. This shift is attributed to expanded production capacity in the U.S. and a decline in construction demand, leading to a surplus in the market. From early 2025, approximately 8.7 billion board feet of capacity have been added by mills, partially as a reaction to tariffs on Canadian softwood. Meanwhile, rising interest rates and a slowdown in housing starts have reduced purchases by builders, causing downstream buyers to undercut limited inventories and reject premium bids. Complicating the situation, uncertainty surrounding Section 232 tariffs has prompted Canada to increase its exports to the U.S. sporadically. Even after the reinstatement of a 14.4% duty, import volumes remain higher than a year ago. Simultaneously, domestic processing volumes in April dropped by nearly 10%, as domestic crushers dealt with ample stock levels, resulting in secondary suppliers opting to destock instead of replenish.