Lumber futures surpassed $630 per thousand board feet in February, the highest since October 2022, amid tariff concerns and tightening supply. U.S. President Trump reaffirmed Monday that tariffs on Canadian and Mexican imports remain “on time and on schedule,” despite both nations’ efforts to bolster border security and curb fentanyl flows ahead of the March 4th deadline. The National Association of Home Builders warned that higher tariffs on lumber and gypsum could push prices up 40%, worsening affordability and slowing the housing market’s recovery. Meanwhile, U.S. building permits edged up 0.1%, signaling stability, while housing starts plunged 9.8%, pointing to near-term weakness.
In related news: Barchart’s Andrew Hecht thinks Lumber Prices Can Break Higher
NEW YORK — Mercer International reported fourth quarter 2024 net income of $16.7 million compared to a net loss of $87.2 million in the fourth quarter of 2023 and a net loss of $17.6 million in the third quarter of 2024. Q4 revenues were $488 million, down from $502 million in Q3, 2024 but up from $470 million in Q4, 2023. Mr. Juan Carlos Bueno, CEO, stated: “In the fourth quarter of 2024, softwood pulp prices remained strong, decreasing slightly from recent record prices.” …Hardwood pulp prices in China and North America decreased in the fourth quarter of 2024 as the market absorbed capacity increases from earlier in the year. …Lumber sales realizations increased, driven by modestly higher prices in the U.S. market, while in Europe, prices remained stable. 
If Canada is hit with 25% tariffs… the trade impacts for the forest products sector will be wide ranging. …Lumber is the most talked about commodity with respect to tariffs, largely due to the size of the market but also the fact that tariffs would be in addition to duties which are already being paid and are set to rise come August. The US can’t supply its own lumber demand and will have to continue to import Canadian lumber. Prices will rise. …The US is even more reliant on OSB from Canada. …In softwood, ~70% of demand is met by imports and in hardwood the proportion is even higher, at 89%. Canada is the largest softwood pulp supplier to the US, representing 74% of imports; a 25% tariff on Canadian goods would inevitably result in higher costs for US customers that produce paper, packaging and tissue. There are no easy near-term substitution options.
Lumber futures have recently surged past $610 per thousand board feet, reaching a near three-month high as market conditions tighten. A combination of mill closures, reduced North American production capacity, and tariff concerns has led to increasing volatility in the lumber market. Investors and traders are closely watching these developments, as the outlook for lumber futures remains uncertain amid ongoing supply and trade disruptions. …One of the primary drivers behind the latest rally in lumber futures is the ongoing reduction in North American production capacity. …Adding to the supply concerns is the looming increase in U.S. tariffs on Canadian softwood lumber. For traders, this means increased volatility in lumber futures as market participants react to policy changes. Higher tariffs could discourage Canadian exports, forcing buyers to seek alternative sources or absorb the additional costs, further driving up lumber futures prices.
BURNABY, BC — Interfor recorded a net loss in Q4, 2024 of $49.9 million compared to a Net loss of $105.7 million in Q3, 2024 and a net loss of $169.0 million. Adjusted EBITDA was $80.4 million on sales of $746.5 million in Q4, 2024. …For the full year, Interfor reported a net loss of $304 million in 2024, a 14% increase from the $267 million net loss in 2023. Total sales fell 9% to $3 billion, down from $3.3 billion in the previous year. …Near-term volatility could be further impacted by a potential tariff on Canadian lumber exports… however, the Company is well positioned with a diversified product mix in Canada and the U.S., with approximately 60% of its total lumber produced and sold within the U.S. …Despite challenges, the company remains positioned to adjust production and capital spending in response to market conditions. …The company plans to invest $85 million in 2025, including the continued rebuild of the Thomaston, Georgia sawmill.
Lumber futures traded above $610 per thousand board feet in February, a near three-month high as mill closures and trade uncertainty exacerbated supply pressures. North American production capacity fell by 3.1 billion board feet in 2024 due to curtailments, with Canadian sawmills particularly affected by rising U.S. tariffs, which could more than double from 14.5% this year. The looming imposition of a 25% tariff on Canadian softwood lumber, combined with existing anti-dumping duties, further tightens capacity for domestically produced alternatives. The National Home Builders Association warned that higher tariffs on lumber and gypsum, largely sourced from Canada and Mexico, could drive lumber prices up 40%, worsening affordability concerns. While a 30-day delay provides temporary relief, ongoing negotiations leave market outcomes uncertain. [END]
VANCOUVER, BC — Western Forest Products announced improved fourth quarter and fiscal 2024 results compared to the same period last year. Adjusted EBITDA was $14.4 million in the fourth quarter of 2024, as compared to negative $1.2 million in the fourth quarter of 2023, and negative EBITDA of $10.7 million in the third quarter of 2024. Adjusted EBITDA was $8.9 million for fiscal 2024, as compared to negative $29.9 million in fiscal 2023. Net loss was $1.2 million in the fourth quarter of 2024, as compared to a net loss of $14.3 million in the fourth quarter of 2023, and a net loss of $19.6 million in the third quarter of 2024. …“Despite challenging markets, we were successful in returning our business to positive EBITDA in 2024,” said Steven Hofer, CEO. …“The planned incremental US tariff will unfairly target and harm Canadian exporters like us, [and] will also hurt American consumers through higher lumber prices.” …We have informed customers of our intention to pass on the incremental US tariff.
The significant risk that tariffs pose to Canada’s economy casts a potentially dark shadow over the housing market. Any economic turbulence arising from tariffs would be felt by participants, whose confidence is critical to the stability of the housing market. …Therefore, assessing the outlook for Canada’s housing market at this juncture is like putting a price on a home before an earthquake—it’s hard to know what shape the structure will be in at the end of the day. Still, we highlight some of the key themes in 2025. …Lower interest rates heat up demand. …Inventory of homes for sale is rebuilding in Canada. …Strained affordability, immigration and uncertainty to keep buyers cautious. …Affordability relief from rate drop will only be partial. …Absent any major economic shock, we’d expect housing market demand and supply to stay balanced in the year ahead, yielding minimal price increases Canada-wide.
Pressing ahead with steep tariffs on Canada and Mexico risks exacerbating the US housing crisis and threatening the broader economy, dozens of congressional Democrats have warned Donald Trump. …In a letter to Trump seen by the Guardian, Democrats noted that the US imports key construction materials worth billions of dollars – from lumber to cement products – from Canada and Mexico each year. “Given the severe housing shortage, compounded by rising construction costs, persistent supply chain disruptions, and an estimated shortfall of 6m homes, these looming tariffs, while intended to protect domestic industries, risk further exacerbating the housing supply and affordability crisis while stifling the development of new housing,” they wrote. More than 40 Democrats urged the White House to consider housebuilding industry estimates that the proposed tariffs will raise the cost of imported construction materials by up to $4bn.
California home builders say they have very little choice but to continue buying Canadian softwood lumber from places like British Columbia, even if US President Donald Trump issues a 25% penalty on imports next month. The state is in the midst of its rebuilding efforts from the Pacific Palisades wildfires that ravaged the Los Angeles area. …Dan Dunmoyer, who is the president of the California Building Industry Association said the rebuild will become a lot more costly. …“The price of lumber is already starting to go up some even without the tariffs in place out of uncertainty, which again is a reason not to move quickly on tariffs. …“We are very desirous to rebuild as quickly as possible and at the lowest cost possible. The timing of tariffs or additional costs to softwood lumber coming from Canada is very ill-timed.”
President Donald Trump “thrives on unpredictability”, said Lawrence Yun, chief economist for the National Association of REALTORS. In the last 30 days alone, multiple tariffs by Trump have been announced, imposed, called off and hotly debated. Now, the tariffs are beginning to take shape. And homebuilders are wary. …The real outcry, though, regards lumber. Roughly 30% of the lumber used in the United States last year was imported – more than 85% from Canada. …the housing industry is sharing concerns. Shortly after Trump’s inauguration, the NAHB applauded his day-one executive order that urged government agencies to take action to lower housing costs and expand supply. But NAHB chairman Carl Harris said raising tariffs will have the opposite effect. …“Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices,” Harris said in a press release.
Experts told us that, in theory, if the US stopped importing crude oil and lumber from Canada and Mexico, it still would be able to meet domestic demand using natural resources available in the U.S. But, in reality, they said, the transition would be costly and take some time to implement, among other complications. “Sure: we could probably meet most of our lumber needs domestically,” said Marc McDill at Penn State University. “The reasons why we don’t boil down to two things: 1) sometimes imports are cheaper than our own suppliers, and 2) we value our forests for a lot of other things.” He added that without lumber from Canada, “1) prices would go up, 2) we would harvest more of our own trees, and 3) we would import more from countries.” …Rhett Jackson at the University of Georgia, said that differences in the lumber produced in the US and Canada may be problematic. …“All lumber is not created equally.”
Year-end 2024 Southern Pine lumber (treated and untreated) exports hit 565.7 Mbf, which was up 11% over the previous year, according to December 2024 data from the USDA. On a monthly basis, Southern Pine lumber exports were up 21.9% in December 2024 over the same month in 2023 but down 2.2% from November 2024. …Softwood imports, meanwhile, were down 11.5% in December 2024 compared with the same month a year ago and down 11% from November 2024. …Mexico remains the largest export market (by volume) of Southern Pine and treated lumber, up 23% over 2023 with 150.2 Mbf of imports. The Dominican Republic, the No. 2 importer of Southern Pine, ended the year 19.1% ahead of 2023 with 92.3 Mbf. India’s total of SYP imports ended 3.1% ahead of last year with 36.6 Mbf. Canada: up 30% with 27.4 Mbf in 2024. Canada ended the year as the No. 5 importer of Southern Pine lumber (treated and untreated).
Japan’s timber industry is seeing notable changes, with predictions of a drop in log imports and varying trends in lumber imports. These shifts are influenced by economic factors, environmental concerns, and policy decisions affecting how Japan uses timber. The Japan Lumber Importers Association has shared its predictions for wood imports, expecting a 13% decrease in log imports for 2024. …While log imports are expected to decline, the situation with lumber imports is more complex. In 2024, lumber imports are projected to increase by 17.2%. However, in the first half of 2025, a 12.5% decrease is expected compared to the same period the previous year. Several factors influence these mixed trends… Japan’s housing starts decreased by 4.6% year-over-year in 2023, with owner-occupied housing falling by 11.4%. These changes directly impact the demand for lumber, influencing import volumes.