FX.co ★ Lumber Trades Above $680

Lumber futures have surged past $680 per thousand board feet, nearing the high of $685 recorded in late March, driven by a supply-demand imbalance in the construction market. On the demand side, U.S. housing starts remained unexpectedly stable at an annual rate of 1.6 million units in June, despite a 2.7% decline in existing home sales to their lowest in nine months, sustaining strong demand for framing materials. Concurrently, U.S. tariffs on Canadian softwood lumber imports continue to inflate landed costs by approximately 9%. Meanwhile, mills in the Pacific Northwest have retracted nearly 20% of their production capacity for routine mid-season maintenance, significantly reducing supply to distributors. Globally, supply chains face headwinds, with European and New Zealand imports hampered by 25% tariffs on Russian lumber and ongoing ocean-freight disruptions, leading to distributor inventories reaching their lowest point in over two years and further propelling the rise in futures prices.