US home buyers affected by rising softwood lumber prices

Source:
Fordaq
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The composite price of framing softwood lumber used in house construction increased by 14% in the first three weeks of February according to Random Lengths a trade magazine.

Further price increases are expected as the US is investigating whether Canada is unfairly subsidising its industry. Canada’s share in the US softwood market has been around 30% in past few years.

US home builders are absorbing the additional cost for now according to the National Home Builders Association but in the longer term the cost of new housing is likely to rise. The Association is urging US domestic sawmills to produce more sawnwood and is encouraging imports from other sources such as Chile in order to increase competition.

Canada and US have started trade negotiations, but little progress is expected until the US investigation is complete. The US Department of Commerce announced in late February that it will postpone the preliminary determination of countervailing duties to late April. Based on recent price increases by Canadian mills, producers expect duties of up to 30%.

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