Lumber Market 2025: Good, Bad, and Ugly News
The lumber market outlook for 2025 is a mixed bag of good, bad, and ugly news. Let’s break it down.
Looking back at the second half of 2024, US lumber prices hit rock bottom, causing BC mills to suffer losses. But there’s hope on the horizon as prices have started to climb back up. However, there are concerns about the drop in Southern Yellow Pine prices and the premium of W-SPF over SYP. Market forces will determine how this imbalance will be resolved.
Moving into 2025, there are several factors to consider:
The good news:
– Interest rates are dropping, which is expected to stimulate wood products spending and house buying.
– Demand for repair, remodeling, and new residential construction is on the rise, thanks to severe housing shortages.
– Sawmill closures in 2024 have reduced excess capacity, leading to potential supply shortages and higher lumber prices as demand picks up.
The bad news:
– US lumber duties and tariffs could be a major hit to BC lumber exports, with proposed tariffs reaching as high as 55% by August 2025.
– Tariffs on Chinese imports could disrupt the market and create price competition in some markets.
– The European Union Deforestation Regulations could lead to further trade disruptions.
The unknown:
– Geo-political issues and supply chain disruptions could impact the market unpredictably.
The ugly:
– BC government forest policies and delays in key operating requirements are working against forest operators, with little support from the current government.
– The outlook for the industry in BC is uncertain, with challenges around sustainable forestry practices and government initiatives.
Overall, despite the potential challenges ahead, there is optimism for the market to trend upwards in 2025. With improving demand and fewer sawmills in operation, prices are expected to increase. President of Russ Taylor Global, Russ Taylor, predicts that the average W-SPF 2×4 #2&Better lumber price will be in the high US$400s/Mbf, around $60-$75 higher than in 2024.
