U.S. framing lumber composite prices rose 0.5% in the week ending October 4 compared with the previous week, and lumber prices are currently 3.6% lower than a year ago. Notable North American sawmill production cuts.
Western Forest Products Inc. recently announced plans to cut production at its British Columbia sawmills by approximately 30 million board feet between October and December 2024. The company noted that market challenges include weak lumber demand and increased U.S. softwood tariffs. Steven Hofer, Western President and CEO: "With U.S. softwood tariffs likely to more than double in the second half of 2025, governments at all levels need to focus on creating a policy environment that supports the forestry industry and encourages domestic investment."
Fastmarkets/RISI estimates that sawmill production cuts have reduced North American softwood lumber production capacity by 3.1 billion board feet by 2024. Many of these cuts occurred in Western Canada.
Canfor Corp., the fourth largest softwood lumber producer in North America, recently announced that it will close two mills in British Columbia and curtail mills in the southern United States by the end of the year. The company cited continued weak lumber markets and increased U.S. tariffs on Canadian softwood lumber as reasons for the mill closures and production cuts. The closures will reduce annual production capacity by approximately 670 million board feet.
North American softwood lumber prices have been particularly volatile in recent years, primarily due to increased demand, tariff increases, supply chain bottlenecks, and insufficient domestic production. To address high lumber prices, NAHB advocates for the following actions:
- Negotiate a long-term agreement with Canada to reduce tariffs and increase imported lumber.
- Increase domestic production by seeking higher public lands lumber sales targets and opening more federal forest lands to logging.
- Reduce U.S. lumber exports to China and other international customers.
- Find new markets to reduce our country's reliance on Canadian lumber imports and make up for domestic shortages.
- Identify new markets (other than Canada) and work with countries that already export softwood to the United States to increase their exports in the United States.