FX.co ★ Lumber Reaches 10-Week Highs

Lumber futures have surged beyond $610 per thousand board feet, reaching a ten-week peak, driven by stable construction activity alongside tightening supply and increasing trade restrictions. In the United States, homebuilding activity remains consistent, with single-family housing starts holding steady at 1.36 million units in April and a slight dip in permits. Meanwhile, Canada has seen a significant 34% increase in multi-unit housing starts, maintaining strong mill orders. However, Canadian timber harvests face challenges due to pine-beetle infestations, prairie wildfires that have scorched more than 200,000 hectares this spring, and stringent logging restrictions that left British Columbia operating nearly 42% below its allowable harvest quota for 2023. Additionally, U.S. sawmill operations have stagnated in the mid-70% utilization range, despite recent increases in capacity. The imposition of approximately 14.5% tariffs on Canadian softwood, coupled with the threat of increased duties, has dampened cross-border shipments, as major exporters redirect their supply to Asian and European markets. Moreover, rising fuel and transportation costs have further elevated delivered prices.