Lumber Extends Decline Amid Tariff Uncertainty

Lumber prices fell below $570 per thousand board feet as tariff uncertainty continued to weigh on demand. Canada’s minister responsible for US trade relations said the country remains committed to negotiations, although reports indicated Canadian officials were dissatisfied with the latest US offer and continued to push for zero tariffs on softwood lumber. Earlier, the US imposed tariffs on several Canadian lumber-related products, while Canadian softwood lumber was excluded. Still, US demand for Canadian lumber fell 1.7% in the first half of the year, while its share of the US market declined slightly. Shipments to markets outside the US also fell 3%. Meanwhile, mortgage rates rose to their highest level in a year, according to Freddie Mac, while mortgage applications declined in the final weeks of July. Construction spending on lumber-intensive single-family housing fell 3.3% year-on-year in June, adding to demand concerns.

Lumber prices hovered around $580 per thousand board feet, remaining near a three-month low as reports of an interim trade deal between Canada and the US eased concerns over reduced supply. Canada’s minister responsible for US trade relations said the country remains committed to negotiations. Earlier, the US imposed tariffs on several Canadian lumber-related goods, although Canadian softwood lumber was excluded. Still, US demand for the Canadian lumber declined 1.7% in the first half of the year, with the American share of trade slipping slightly. Shipments to markets outside the US fell 3%. Meanwhile, weakened homebuying activity continued to pressure demand. Mortgage rates rose to their highest level in a year, according to Freddie Mac, while mortgage applications declined in the final weeks of July. Construction spending on lumber-intensive single-family housing also fell 3.3% year-on-year in June.

Lumber prices fell below $580 per thousand board feet, heading toward a three-month low as weaker US housing demand and persistent trade uncertainty weighed on the market. While Canadian softwood lumber was exempt from US's new 50% tariffs, it remains subject to existing duties of nearly 35%, pressuring producers' margins. The Forest Products Association of Canada said the trade measures dealt a further blow to the industry already operating below capacity amid production curtailments and closures, while Ottawa has extended support measures. The US Lumber Coalition argued that Canada's excess production capacity continues to distort the market. Meanwhile, mortgage rates climbed to their highest level in a year, according to Freddie Mac, while mortgage applications declined in the final weeks of July, reflecting deteriorating homebuying activity. Demand was further pressured by weaker construction spending on lumber-intensive single-family housing, falling 3.3% from last year in June.