Key Highlights

● Lumber futures rose 0.21% to $516.57 per thousand board feet Thursday.

● Futures are down 4.25% on the month and 4.87% from a year ago.

● Anti-dumping and countervailing duties on most Canadian softwood fell to 24.75%.

● US builder confidence is at its lowest level in 14 years.

Lumber futures rose 0.21% to US$516.57 per thousand board feet in Thursday's session on 29 October, a small bounce that keeps the market near its lowest level since September 2024. Weak housing demand is holding prices down, while a round of trade changes on Canadian wood is shifting the supply picture.

Prices are down 1.23% on the week and 4.25% on the month, 4.07% so far this year and 4.87% from a year ago.

Weak Housing Against Changing Trade Rules

Lumber is caught between a housing market that has little appetite for wood and a set of trade policy changes that lower the cost of importing it. Neither side has yet pushed prices clearly away from their two-year low.

Housing Is the Main Weight

US housing remains the main demand story. September new home sales ran at an annual pace of 676,000, 5.3% below a year earlier, and single-family starts are down 4% so far this year. Builder confidence is at its lowest level in 14 years, and mortgage rates reached 7.4% in October, the highest in three years. Labour shortages and construction costs are also weighing on builders.

When builders are cautious, dealers and wholesalers tend to hold lower inventories and buy later, which leaves prices without a buyer at higher levels.

Duties and Tariffs Are Changing

Trade policy is the second driver. The US Commerce Department's seventh administrative review set the combined anti-dumping and countervailing duty for non-selected Canadian producers at 24.75%, down from about 35.16%. The rates apply to goods entered in 2024 and took effect with Federal Register notices on 19 October. Company-specific rates range from 20.02% to 31.11%.

A separate 10% Section 232 tariff on imported softwood lumber remains in place, which brings total duties to 34.75% on the figures builder groups cite. The US Lumber Coalition backed the duty decision, saying that forestry groups have long accused Canada of dumping lumber in the US.

The White House has also removed 50% tariffs on Canadian plywood, effective 30 October, though softwood lumber tariffs remain in place and elevated. That could make plywood a relatively cheaper substitute in some construction uses. President Donald Trump also signed an order aimed at reducing homeownership costs.

Producers Respond With Cuts

Supply is already adjusting to the weak price. One large North American producer reported a third-quarter net loss of US$80 million on sales of US$1.363 billion on 28 October. It said it would indefinitely curtail a lumber mill in Leola, Arkansas, which removes 225 million board feet of southern yellow pine capacity a year, and an oriented strand board mill in Huguley, Alabama. It expects an impairment of US$200 million to US$220 million in the fourth quarter and guided shipments to the low end of 2.4 billion to 2.7 billion board feet for 2026.

Capacity cuts of that kind remove supply and can give prices support if other producers follow.

Lumber Watch: Duty Notices, Mortgage Rates and Curtailments

Weekly mortgage rates, housing starts, builder sentiment and further announcements on mill curtailments are the next signals, along with any change to the 10% softwood tariff and the effect of the plywood tariff removal from 30 October. Futures will also move through the November expiry and the roll to January.

Prices could find support from further capacity cuts, from a fall in mortgage rates or from a recovery in builder confidence. They could weaken again if housing data stay soft, if curtailments prove too small or if lower duties add supply from Canada.