Canada's lumber import prices rose in December: tariffs and supply chain risks affect market stability

2025-01-22
Price Fluctuations, Supply Chain Risks, tariff, Canadian Timber Market, Raw Materials Price Index, Industrial Product Price Index, Timber imports, Stable supply, Softwood Timber

In December, the price of lumber and other wood products in Canada rose by 1.3%, mainly due to the increase in softwood lumber prices and supply constraints. The depreciation of the Canadian dollar also had an impact on the price index, and the market is expected to continue to face price fluctuations and supply chain risks.

Canadian lumber import prices rise in December

release date:January 22, 2025

Statistics Canada (StatCan)The Industrial Products Price Index (IPPI) and Raw Materials Price Index (RMPI) results for December were released on Wednesday.

Data showed that IPPI rose by 0.2% month-on-month and 4.1% year-on-year.

StatCan pointed out that some product prices in the IPPI are denominated in US dollars, so changes in the exchange rate between the Canadian dollar and the US dollar may have an impact on the index. Between November and December, the Canadian dollar depreciated by 1.9% against the US dollar. If the exchange rate of product prices denominated in US dollars remained unchanged during this period, the IPPI should have fallen by 0.1% month-on-month instead of rising by 0.2%.

Lumber and other wood products prices rose by 1.3% in December. This was the fifth consecutive month of increases for this product group. Softwood lumber prices rose by 2.7%, accounting for the majority of the month-on-month increase in December. The price increase was driven by supply constraints resulting from extended shutdowns and temporary layoffs at some Canadian sawmills due to a weak fall harvest season, StatCan said.

RMPI increased by 1.3% month-on-month in December, while it fell slightly by 0.1% in November.

Year-on-year, the RMPI rose by 9.1%. The fluctuation in December was partly affected by the base effect, as the RMPI fell by 4.9% in December 2023.

LumberFlow Expert Interpretation

The data release shows that the Canadian lumber market is facing a trend of rising prices, especially for softwood lumber. This situation may cause Chinese importers to consider higher costs and potential supply chain risks when purchasing. As the Canadian dollar depreciates and supply restrictions continue, lumber prices are expected to continue to fluctuate, and importers should pay close attention to market dynamics in order to make more informed purchasing decisions.

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