In March 2025, spruce lumber futures broke $660 per thousand board feet, hitting a 2.5-year high. The rally was driven by tightening construction-sector demand layered on top of supply shortfalls. U.S. housing starts surprised to the upside in February with an 11.2% jump, signalling renewed appetite for building materials.
Supply pressures intensified with production cuts in Canada. Wildfires, slowed seasonal harvest activity and saw-mill closures took more than 3.1 billion board feet of softwood capacity offline across North America, opening a significant market gap and pushing prices higher.
Another critical factor was uncertainty around U.S. import tariffs. Current duties at 14.5% are expected to roughly double, prompting builders to stockpile raw materials. Historical patterns show stockpiling phases can lift prices by as much as 25% — a mechanism reignited by tariff uncertainty.
Spruce producers have raised prices in anticipation of future trade restrictions and supply chain disruption. Mill prices are currently up between 25% and 65%. Analysts expect elevated volatility ahead; price pressure is likely to persist in the near term for builders and investors.
Key Takeaways:
1. Spruce futures topped $660 in March 2025, the highest in 2.5 years.
2. An 11.2% jump in U.S. housing starts strengthened demand.
3. Canadian wildfires and mill closures removed 3.1 billion board feet of capacity.
4. Expectations of doubling the 14.5% U.S. tariff drove builders to stockpile.
5. Mill prices are up 25-65%; high volatility is likely to persist near-term.
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