On the one hand, massive rainfall which hit British Columbia last week led to a partial breakdown of railway and highway logistics. In some areas, it will take months until all damage is repaired.
Furthermore, the US is going to double duties on Canadian lumber, a decision which was expected. However, it will also change bilateral trade, mostly through increasing prices in the US.
According to Madison’s Lumber Reporter, the most important timber construction product 2-by-4 (Western SPF, KD, #2 & better) saw a US-$10 increase, bringing the price to US-$630/1000 bft. With a strong US dollar (US-$1.14/€), European exporters currently make around €358/m³, i. e. €7/m³ more than last week (free Great Lakes region, actual size).
The Lumber Futures for January 2022, traded at the Chicago Mercantile Exchange, are currently at nearly US-$800/1000 bft. In the past three months, they saw a 60% increase. The damage caused by the disaster in Canada and the duties have probably been taken into account in the Future price trend already. With an unchanged currency exchange rate, the January price would be at around €450/m³ and thus only €10/m³ lower than what European exporters earned at the beginning of this year.
