Supply cuts from a top Canadian producer are sending lumber prices on a rally even as rising interest rates put a chill on housing markets.
Lumber futures rose for the third straight session Wednesday to US$601.80 per 1,000 board feet on the Chicago Mercantile Exchange. That’s the highest intraday price since July 22 and the longest rally since July 1.
The jump comes as West Fraser Timber Co. announced reductions in output at two British Columbia sawmills, equivalent to 2.5 per cent of its total North American capacity. It’s also cutting plywood production at another facility.
Rising lumber prices affect real estate markets in the US as well as Canada. US builders get more than a quarter of their lumber from the northern nation, the world’s largest softwood lumber exporter.
“The bottom is in for now,” said ERA Forest Product Research’s Kevin Mason, noting West…