We’re going to see major lumber price fluctuations in spring 2025.
The reasons are due to a combination of factors. There’s rising construction demand, global trade policies, and supply chain disruptions.
Indeed, almost all the factors that affect lumber price patterns are external. Seasonal trends, changing economic forces, and global shipping challenges, each play a role in determining future lumber demand. These factors can’t be controlled, and therefore, accurate predictions are difficult to make.
This article will break down why lumber prices are increasing, how soon the market might stabilize, and the lumber price prediction for 2025.
We’ll also share practical strategies to help you save costs when the lumber prices go high (or in case of extreme lumber price fluctuations).
Factors Driving Lumber Prices in Spring 2025
1. Increased Construction and Housing Market Demand
Let’s address the elephant in the room: increased housing demand. Almost 26% of the global lumber demand comes from the U.S. Forest Economic Advisors, LLC, says there’s a massive shortage of homes that haven’t been built in the last decade.
And let’s not forget about home renovations. Due to many homeowners actively renovating and repairing their homes, the lumber demand is expected to remain high.
2. Global Trade Policies and Their Impact On Lumber Supply.
We know one thing for sure: tariffs, export restrictions, and trade agreements have always had a huge impact on lumber prices.
2025 is going to be no different.
Recently, lumber exports from Russia have been limited due to the conflict happening in Ukraine. This has created a gap that we expect U.S. and Canadian markets to fill.
In addition, Canada has limited its supply to the U.S. because of tariffs. Just like that, the U.S. has lost its access to one of the largest sources of lumber globally. This has created significant pressure on domestic supply and prices.
3. Shipping Costs and Logistics Challenges.
Some of the challenges we face include limited container availability and port congestion. This leads to delays in lumber deliveries, which create shortages in local markets.
Also, we can’t ignore natural disasters.
For instance, wildfires in Western Canada and the U.S. have affected timber production. This not only reduces available lumber but also increases transportation costs due to delays in shipments.
Comparing Trends With Previous Years
2020-2022
In May 2021, we saw lumber prices reach a whopping rate of $1,600 per thousand board feet (almost 200% above pre-pandemic levels).
A big reason for this was people engaging in DIY home renovation projects during the pandemic, thanks to low interest rates.
2023
Lumber prices averaged between $450 and $550 per thousand board feet throughout the year, which was a relief for businesses.
Even though the demand for home renovation remained strong, mills were able to meet the demand a lot better than they did during pandemic times.
2024
We saw lumber prices stabilize in the range of $440 to $665 per thousand board feet.
It was in 2024 that things began getting back to normal. We saw the prices changing based on normal seasonal patterns.
However, there are other factors that affect lumber pricing structures. These include global trade policies and economic shifts. Meanwhile, we can never be 100% sure if lumber prices are going to remain in a certain range.
What Are the Market Predictions for 2025?
There are 2 seasons when you could expect a change in lumber prices; spring and late summer.
While the demand for lumber decreases during late summer, leading to lower lumber prices, spring is the season we always see a huge surge in demand. Primarily because of the increased construction activity.
According to predictions, we’ll see some fluctuations in the pricing as we do every year. However, just to give you an idea, expect their rates to be in the range of $500-$600 per thousand board feet.
Here again, we can’t turn a blind eye to the external factors.
Although inflation is expected to ease in mid-2025, interest rates will still be high. This will make homeowners shift to renovating homes instead of buying new ones, causing lumber prices to go high again.
Natural disasters are yet another factor we need to consider. Wildfires can affect timber production, and labour shortages can affect transportation times.
Lastly, tariffs imposed on lumber imports into the U.S. can have a huge effect on lumber pricing. This can be a concerning statement for businesses, as they’ll have to change their sourcing strategies.
So, what’s the solution?
Business Strategies for Navigating Lumber Price Fluctuations
1. Bulk Purchasing To Mitigate Price Increases
Did you see how an event leads to a sudden increase in lumber prices? Bulk purchasing helps you avoid just that.
Although suppliers are usually reluctant to offer lower rates, showing them your commitment to future purchases and ordering in bulk can help negotiate lower prices.
2. The Benefits Of Placing Early Orders
Timing is everything when it comes to lumber purchasing. Placing your order early means you’re securing the deal way before the lumber price surges.
You’re also one of the early businesses to place an order, so there’s no chance of delay.
Lastly, you can order lumber from multiple sources and compare the price and quality to ensure you get the best lumber at the best prices.
How good is that?
3. How Businesses Can Stay Flexible And Adjust To Pricing Trends
First things first, keep a close eye on market trends. Review industry reports and forecasts to see the shift in pricing and change your strategies accordingly.
Another smart move is to implement flexible pricing models. A good example of this is the cost-plus pricing model.
With this, you pass the material costs on to customers, and your business doesn’t have to bear all the costs itself.
Conclusion
Based on the above discussion, we know that lumber prices will continue to fluctuate due to reasons we can’t control. But the painful part is your business has to pay the price.
Higher expenses, delayed projects, and reduced profit margins are some of them. If you still don’t have a solid strategy to fall back on, chances are your business is going to suffer in 2025.
One way out is to build relations with suppliers that can be trusted in times of uncertainty and deliver quality consistently.
If you’re unsure where to start, consider checking out Gulf South Forest. We deliver quality lumber globally and have 50+ countries trust our lumber quality.
Whatever the uncertainty, we ensure your business always has quality lumber on the go. Contact us today.
