This week has seen the highest softwood lumber prices before or after the stratospheric spikes of the pandemic.
Spot market prices reached $686.72 per thousand board-feet in intraday trading on Monday, March 24, according to Trading Economics. By the end of March 26, the price was down to $671.09.
Multiple factors are in play. Supply from Canada has been tight because of wildfires, seasonal logging slowdowns, sawmill closures, and, of course, concerns about upcoming U.S.-imposed tariffs.
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“It’s a mix of seasonal demand strength and concerns over tariffs,” Michael Goodman, president of Sherwood Lumber, told GlobeSt.com. “As we head into spring, construction activity typically picks up, driving higher demand for lumber. At the same time, expectations around potential tariffs on Canadian imports are creating uncertainty, which often leads buyers to stock up, pushing prices even higher.”
On March 21, the week-to-week framing lumber composite price was up 0.2%. That specific category of lumber, which can include lower-quality and cheaper products good enough for framing buildings, rose to $486 per thousand board feet, as the National Association of Home Builders reported. That was up 14.9% yearly and the highest price since June 2023.
Lumber futures were up 4.6% week-over-week, or 11% year-over-year. That was also up 5.6% month-over-month.
Most of the price growth in 2024 was in the 2x10 market. Western spruce, pine, and fir were up 63.2% year-over-year, and green Douglas fir 2x10 was up 53.6%. Additional increases this year are building on already strong prices.
Uncertainty about tariff levels also exists, beyond President Trump’s plans, which have been contentious between the U.S. and Canada. NAHB explained at the time that the previous increased tariffs on lumber from Canada in August 2024 boosted prices from 8.05% to 14.54%.
Beyond the administration tariff hikes, the Department of Commerce periodically reviews duties on Canadian softwood lumber. The sixth annual review was originally planned for February, but the deadline was pushed off by as much as 90 days. The current rate of 14.54% is expected to double.
The prospect of tariffs was already having an effect in Q4 2024. Western Forest Products Inc. cut British Columbia sawmill production by about 30 million board feet because of weak lumber demand and concern about growing tariffs.
Canfor, North America's fourth-largest softwood lumber producer, closed two British Columbia mills and cut production in southern U.S. properties. That eliminated 670 million board feet of annual production.
NAHB says that steps needed to lower wood prices include a long-term tariff deal with Canada, a boost to imported lumber, an increase in domestic production, a reduction of U.S. lumber exports to China and other international clients, and new markets to reduce reliance on Canada.
Goodman added that things could also get worse. “Additionally, factors like supply chain disruptions, transportation costs, and interest rate fluctuations can all contribute to market volatility,” he said.
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