Highlights

  • January lumber futures traded at $520.00 per 1,000 board feet, up $4.50, while the expiring November contract fell to $499.50.
  • The US cut combined duties on most Canadian softwood to 24.75% from 35.16%, but a separate 10% Tariff remains.
  • US housing starts fell 5.2% to 1.221 million in September, while builder confidence sits at its lowest since 2012.
  • West Fraser will indefinitely idle its Leola, Arkansas sawmill and an OSB mill in Lanett, Alabama.

Lumber is stuck near a two-year low, and talks that could add more Canadian Supply to the US market are about to restart. January 2027 futures were quoted at $520.00 per 1,000 board feet on Wednesday 11 November, up $4.50, while the expiring November contract slipped to about $499.50. Washington and Ottawa are preparing to resume discussions after months of stalemate, just as US housing stays soft. For West Fraser (TSX:WFG) and Interfor (TSX:IFP), tariffs, Demand and mill closures all pull in different directions.

Prices Near a Two-Year Low

The two quotes are for different delivery months and are not interchangeable. Futures fell below $520 on 5 November, close to their lowest in more than two years, as trade talks raised hopes of a tariff deal. On 27 October the November contract settled at $507.50, then the lowest of 2026, against $539.50 at the end of September and a peak of $695.50 in August 2025.

Weak US housing activity and lingering trade barriers are weighing on the market, while mill closures across North America could tighten supply.

Tariffs and the Trade Talks

Policy is the most immediate swing factor. The US Department of Commerce cut the combined anti-dumping and countervailing duty rate on most Canadian softwood to 24.75% from 35.16% in its seventh administrative review, effective 19 October. A separate 10% national security tariff still applies, leaving a total charge of almost 35%.

On 3 November, Washington and Ottawa were reported to be preparing to restart talks. A draft agreement discussed in August would have removed the additional 10% tariff, but negotiations collapsed over revised US terms. If tariffs fall, Canadian mills could ship more to the US, which would probably weigh on US prices. The outcome is not yet known, and a deal could take time or exclude lumber.

Housing Demand Stays Weak

US housing starts fell 5.2% to a seasonally adjusted annual rate of 1.221 million in September and permits slipped to 1.40 million, though the Census Bureau said the change in starts was not statistically significant. New home sales were 5.3% lower than a year earlier at an annual pace of 676,000, builder confidence is at its lowest since 2012, and Mortgage rates are above 7% even after three straight weekly declines. Lower rates could revive building, but that depends on Federal Reserve policy and long-term bond yields.

Company Exposures

Interfor is one of the most directly exposed producers. It reported a third-quarter net loss of $45.6 million and adjusted EBITDA of $76.9 million on sales of $832.1 million, with an average selling price of $751 per 1,000 board feet. About 20% of its production is exported to the US and subject to duties or tariffs, and it expects about US$63.3 million of incremental non-cash duty expense in the fourth quarter. October benchmark prices averaged US$32 below the third-quarter level for Western SPF and US$49 below for the Southern Yellow Pine composite. Net Debt stood at $788.2 million with Liquidity of $462.4 million, and management expects Volatility into early 2027.

West Fraser has both Canadian and US South mills, so a tariff change would affect parts of its Business differently. It will indefinitely idle its Leola, Arkansas sawmill, with capacity of 225 million board feet a year, and an OSB mill in Lanett, Alabama. Curtailments reduce volumes and can add costs, but they may support prices if industry supply falls.

What Could Move Prices

Prices could firm if more North American mills curtail output, mortgage rates fall further and lift housing starts, or a trade deal is delayed or leaves the 10% tariff in place. They could weaken if an agreement cuts tariffs and lets Canadian supply flow south, or if housing deteriorates.

Watch official statements on the talks, the 18 November release of October housing starts, weekly mortgage rates, builder confidence, Friday's CFTC data and the roll from November into January, which can distort continuous charts.