Lumber prices are on the rise once again, hitting a six-month high of $930 per thousand board feet with high demand from a hot housing market, according to Insider. Another factor contributing to a spike in prices is severe flooding in British Columbia, home to one of Canada’s largest lumber producers. Resulting transportation disruptions have caused some of the world’s biggest lumber companies to pause shipments, leading to major price inflation.
The Commerce Department also recently announced that it will impose a tariff of nearly 18% on all imports of Canadian softwood lumber in 2022. Despite significant supply shortages, experts predict that lumber prices will normalize in the near future as more producers get back on their feet.
The price of lumber has doubled from summer lows after a confluence of factors put upward pressure on the red-hot commodity, but some normalization may be on the way soon.
Lumber futures rose for the fifth-straight session on Friday, hitting a six-month high of $930 per thousand board feet and gaining 21% for the week. Still, they're 45% below their record high of $1,711 reached in May.
The main cause is severe flooding in British Columbia that has hampered the operations of West Fraser Timber, one of Canada's largest lumber producers, according to Ross Price, director of finance at commodity trading platform Mickey Group.