Russ Taylor, President of Russ Taylor Global, Vancouver/CA; www.russtaylorglobal.com
For Euro lumber mills exporting to the US, sawmill margins remain near breakeven levels to yielding negative margins at current prices. Scandinavian log prices reached historic high levels in mid-2025 before easing but they are still expensive relative to most market prices. German and Austrian log prices are even higher and have maintained an upward trajectory for about 18 months This means that Euro mills need high prices and US prices have not been high enough so far in 2026 – even though prices have just moved off their highest levels in over six months.
I expect that Euro mills will keep shipping to maintain a US market share, although at lower volumes, especially if the US market offers better returns than other markets.
In terms of the US lumber market, the month of May has seen prices starting to retreat in some species and others are trying to hold on. The “normal” US lumber cycle is for prices to ease in second quarter before picking up in third quarter. I expect the market is setting up for exactly this scenario – but how and when – and if - market prices rise is always a wildcard.
W-SPF prices have moving upwards from their early December 2025 low of US$380/Mbf to US$490/Mbf in April. In May, prices had started to ease and were US$478/Mbf ($309/m3) in mid-May. Pricing by species continues to be relatively volatile. For example, the price spread between W-SPF 2x4 (FOB BC mill) and Southern Yellow Pine (West) 2x4s (FOB mill) was US$175/Mbf ($113/m3) in mid-October 2025 and by late March, the price spread was zero before SYP-West achieved a premium over W-SPF. By mid-May, SYP-W was selling at a big discount of US$66/Mbf ($43/m3) to W-SPF. All this means is that the spring market peak was reached in April for W-SPF and SYP. However, US West prices were still holding in mid-May.
I expect that the average annual price for W-SPF 2x4s (FOB BC mill) will now increase by up to only 5% in 2026 ($490/Mbf ($317/m3) vs. $465 in 2025) and SYP(W) 2x4s will increase by up to 15% ($430/Mbf ($278/m3) vs. $369 in 2025). For euro spruce 2x4 16-foot exports to the US east coast, I expect prices to average US$680/Mbf ($439/m3; €375/m3) in 2026. However, with current prices being below these annual forecast prices, this means that there will need to be some higher price movements coming!
The good news is that the supply and demand balance in 2026 has been much better than in the last three years. This is setting up the US market for some price volatility with a potential price spike in third quarter. Uncertainty is still a crucial factor in markets, and this could create some unexpected surprises when market demand picks up and/or falls, especially in the shadow of the oil crisis.
The US sawmills are essentially the only ones making money. US South mills were making well over US$150/Mbf ($100/m3) recently as lumber prices soared from seasonal demand in first quarter. Even with much lower prices, US South sawmills should be making attractive sawmill margins. The US West mills are also making money, as they are enjoying their own indirect government subsidy from the 35% duties placed on Canadian lumber and Section 232 tariffs of 10% on all countries. Must be nice while most other producing regions struggle to break even…
