Housing market funk has lumber traders expecting rally to fizzle

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Major lumber producers are slashing production as buyers still spooked by rising interest rates are passing up cheap supplies. Read more.

Benchmark futures in Chicago rose as much as five per cent to US$423 per 1,000 board feet Thursday — the highest price in a month — heading for the longest rally in two weeks. The bounce comes after prices slumped to the lowest in more than two years last week.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter.

“It’s more like crickets lately,” said Charlie Thorpe, a commodities trader at Olympic Industries in North Vancouver. “It’s been tough slogging for sales.” Lumber’s plunge, which made it the worst-performing commodity last year, marked a dramatic reversal from the all-time highs set in 2021, when tight supplies were snapped up by shut-in North Americans who were building or renovating homes during pandemic lockdowns.Article content

Canadian producers West Fraser Timber Co. and Canfor Corp. already have announced output reductions from British Columbia sawmills this year, and further curtailments are expected, said John Cooney, an analyst with ERA Forest Products Research. US homebuilders buy more than a quarter of their lumber from Canada.

“Homebuilders have all battened down the hatches,” Cooney said in an interview. “I think there’s a couple of quarters of pain coming up.”

 

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