Lumber Drops to Near 1-Year Lows
In September, lumber futures dropped to under $520 per thousand board feet, marking their lowest point in almost a year. This decline was primarily due to an apparent imbalance between oversupply and diminished demand for homebuilding. The oversupply intensified following speculative stockpiling in anticipation of a significant increase in U.S. duties on Canadian softwood. These tariffs surged from approximately 15% to over 35%, creating a substantial inventory backlog cascading throughout the supply chain, from mills to dealers, which now requires resolution. Concurrently, demand for new residential construction has waned. U.S. building permits have fallen to their lowest since June 2020, while high mortgage rates and the typical seasonal slowdown have further reduced consumption.
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