Lumber futures have surged to their highest level in over two and a half years. This increase follows an investigation ordered by former U.S. President Donald Trump. The probe focuses on lumber imports into the U.S. and aims to boost domestic timber production.
On Saturday, Trump directed the Commerce Department to evaluate the potential national security risks associated with lumber imports. Most of these imports come from Canada. This move coincides with the upcoming 25% tariff set to take effect on Tuesday. The tariff could significantly impact Canadian lumber exports to the U.S.
In response to this news, Chicago lumber futures climbed by 3.5%, reaching $657. This marks the highest price level in more than two years. However, not all market players benefited from this surge.
Shares of Canadian lumber companies suffered declines on Monday. Interfor Corp (TSX:IFP) fell by 9% in Toronto trading. Canfor Corporation (TSX:CFP) dropped 6%, while West Fraser Timber Co Ltd (TSX:WFG) declined 3.5%. These companies face challenges due to the impending U.S. tariff and increased scrutiny on Canadian lumber imports.
While Canadian firms struggled, U.S. timber companies experienced gains. Weyerhaeuser Company (NYSE:WY) rose by 4.3% in New York trading. Similarly, PotlatchDeltic Corp (NASDAQ:PCH) saw a 2% increase. The investigation and potential tariff adjustments may further benefit domestic producers.
With the investigation underway and tariffs looming, the lumber market remains volatile. Investors should monitor policy developments closely. U.S. timber companies may continue to gain from trade restrictions, while Canadian firms could face further losses.
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Lumber futures surge to a two-and-a-half-year high as the U.S. investigates Canadian imports. Discover how this impacts traders and markets.
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