Lumber Price

 

Lumber refers to wood that has been cut into beams or planks of varying lengths. Put differently, lumber refers to a product that is made when wood logs are cut into various sizes at a sawmill. Therefore, it is called random length lumber.

 

Quick Overview of Lumber

✔️An introduction to and explanation of lumber
✔️The production of lumber
✔️Trading lumber as a commodity
Factors driving the price of lumber as a commodity
The uses of lumber
Seven interesting facts about trees

 

An introduction to and explanation of lumber

Lumber is a key commodity that is used in numerous industries, including furniture making, the building of homes, wood flooring, and kitchen cabinetry.

Lumber is also referred to as sawn wood. Furthermore, in certain countries, for instance, the United Kingdom (UK) the words lumber, and timber are used interchangeably and in other countries like the USA and Canada, the terms have different meanings.

DICTIONARY.COM explains the differences as follows: ‘In the US and Canada, timber is typically used to collectively refer to trees – or the wood of such trees – that have yet to be cut or processed, while lumber typically refers to wood that has been processed as a building material (boards and planks). Elsewhere, especially in the UK, the word timber is used to mean the same thing as lumber. (Accentuations are by the article writer.)

The origins of the words timber and lumber are described as follows by DICTIONARY.COM: ‘Timber comes from an Old English word that was originally used to mean “house, building material, wood, trees.” The noun lumber comes from the verb lumber, meaning “to move clumsily or awkwardly,” such as due to carrying something heavy (like planks of wood).’ (Accentuation by the article writer.)

The Oxford Advanced Learner’s Dictionary considers lumber as a synonym for timber. Although, the dictionary also defines lumber (as a noun) as ‘pieces of furniture, and other large objects that you do not use anymore.’

In addition, the dictionary defines timber as:

• ‘Trees that are grown to be used in building or for making things.’
• ‘Wood that is prepared for use in a building.’
• ‘A long heavy piece of wood used in building a house or ship.’

The first uses of lumber go thousands of years back, preceding written history. For instance, in France, at a site near the city of Nice, archaeologists discovered a hut with wooden supports that were built thousands of years ago.

In the past, craftsmen used saws, chisels, and iron axes to cut wood, making lumber. Wikipedia mentions that the Hierapolis sawmill in Asia Minor (nowadays Türkiye) which was part of the Roman Empire is considered the earliest known sawmill. It was a water-powered sawmill operating in the second half of the third century.

 

The production of lumber

• Top ten global exporters of lumber

According to figures obtained from World’s Top Exports, the following countries were the top ten exporters of lumber in the world in 2025:

Position	Country	Lumber exports (US dollars)	Contribution to total global lumber exports	Export increases from 2025 to 2025
1	Canada	$13.4 billion	23.9%	73.2%
2	Russia	$6.1 billion	10.8%	43.8%
3	Sweden	$5.3 billion	9.5%	58.7%
4	Germany	$4.3 billion	7.7%	69.0%
5	USA	$3.4 billion	6.1%	34.1%
6	Finland	$3.0 billion	5.4%	70.8%
7	Austria	$2.6 billion	4.6%	67.3%
8	Latvia	$1.4 billion	2.6%	83.6%
9	Thailand	$1.1 billion	1.9%	14.3%
10	Belgium	$990.4 million	1.8%	58.7%

 

Remarks about the top ten countries:

• Six of the countries – Sweden, Germany, Finland, Austria, Latvia, and Belgium – are European countries.
• Russia is a transcontinental country, meaning it is located on more than one continent. Seventy-seven percent of Russia’s territory is in Asia, while twenty-three percent of the country – the western part – is located in Europe.
• Canada and the USA are situated on the continent of North America.
• Only one country, Thailand, is an Asian country.
• The top ten countries contributed 3 percent to the total global production of lumber in 2025.
• Among the top exporters listed above, the following three countries experienced growth of more than 70 percent in their lumber exports: Latvia’s sawn wood exports increased by 83.6 percent, the lumber exports of Canada by 73.2 percent, and Finland’s exports were up 70.8%.
• Conversely, the following three countries reported modest increases in their sawn wood exports in 2025: Russia (up 43.8%), the USA (growth of 34.1%), and Thailand (up by only 14.3%).
• Regarding net exports – which is the value of the total lumber exports of a country minus the value of its total imports of sawn wood in a specific year – World’s Top Exports reported the following interesting figures:

(Figures are indicated in US dollars. In the brackets, the net export surplus or deficit from 2025 to 2025 is indicated as a percentage. The number order of the countries is congruent with the list above, indicating the top ten global lumber exporters in 2025.)

1. Canada: $12.7 billion (net export surplus up 73.3%)
2. Russia: $6 billion (up 44%)
3. Sweden: $5.1 billion (up 60%)
4. Germany: $2.1 billion (up 79.5%)
5. USA: -$10.8 billion (net export deficit up 84%)
6. Finland: $2.9 billion (up 72.7%)
7. Austria: $1.5 billion (up 76.1%)
8. Latvia: $990.7 million (up 68.9%)
9. Thailand: $879.5 million (up 15.9%)
10. Belgium: Not available

Concerning net lumber exports of the top ten lumber exporters: In terms of percentage, Germany was the best performer (79.5%) and the USA the worst performer with a net export deficit of 84%. Regarding US dollar value, Canada was the top performer with $12.7 billion while the USA’s performance was the lowest, with a significant export deficit of $10.8 billion.

 

• Top five importers of sawn wood in 2025

In 2025, the top five importers of lumber (sawn wood) were the USA ($8.33 billion), China ($6.91 billion), United Kingdom ($2.01 billion), Japan ($1.61 billion), and Germany ($1.51 billion), according to the Observatory of Economic Complexity (OEC), ‘an online data visualization and distribution platform focused on the geography and dynamics of economic activities.’

 

• Lumber manufacturing

Lumber manufacturing can be classified into three main activities, namely logging, milling, and seasoning.

 

Logging

Logging refers to the process of cutting down trees, trimming the trees, and transporting the logs to a sawmill.

Logging comprises several steps, which can be explained as follows:

Felling

Felling refers to the activity to cut down a tree. Before a tree can be felled, it must be marked, indicating that it is ready to be cut down.

The worker who falls the tree is called the faller or logger. In the USA and Canada, fallers have historically been called lumberjacks. The duties of the faller are, amongst other duties: determining the direction in which the tree should fall, ensuring that it will not damage other trees when it falls and that it will need little effort to move the fallen tree to the loading area.

Once all the necessary precautions have been applied, the faller makes an undercut on one side of the tree, at the base of the tree, to control in which direction the tree will fall.

When the undercut has been made, the faller makes the main cut on the opposite side of the tree. To prevent the tree from pushing down on the faller’s saw, wedges may be driven into the cut behind the saw as it cuts deeper into the trunk.

The shout ‘Timber!’ is used to warn other loggers and workers that a tree that has been cut is about to fall.

Nowadays, loggers use battery powered-chainsaws or petrol (gasoline)-driven chainsaws to fell trees, making tree felling safer and less strenuous.

 

Sawing and preparing the fallen trees (logs)

Once a tree has fallen, loggers use chainsaws to cut off the big limps from the trunk. The following step is bucking, the process of cutting the tree into usable lengths.

The next step is called yarding, referring to the moving of felled trees to a central collection point referred to as the landing, which is a cleared area. Yarding is executed either with cables that lead from the landing, self-propelled yarders or with tractor-type vehicles, which is the most common method of yarding. Large tyres or crawler treads enable tractors to operate in rugged terrain. Typically, the tractors drag, or skid, the logs to the landing.

 

Transporting the logs to the sawmill

The landing receives logs from various directions. The logs are then transported to sawmills, also called lumber mills.

Formerly, logs were transferred to mills by railway or were floated downstream in rivers. Although these methods are still in use, nowadays, most logs are transported by large trucks. Mechanical loaders at the landing lift the logs onto the trucks.

 

Milling

In forestry, milling refers to the process at a sawmill where logs are cut into lumber according to required lengths.

 

Debarking

The first step in the milling process is to debark the logs, meaning to remove the bark from a log. There are different methods of debarking. In one method, debarking equipment is used that follows the configuration of the log and does not cut deeper than the thickness of the bark. Other debarking methods applied are high-pressure water jets which blast the bark from the logs, and sharp-toothed grinding wheels.

 

Bucking

The next step is to cut the logs into predetermined lengths, a process called bucking. Depending on the size of the logs, one of two ways are applied to cut the logs into varying sizes. Saws used include vertical saws, called, head-rig saws, and band saws.

Subsequently, the logs are cut into boards, using circular saws and band saws. This step is referred to as ‘conversion,’ which, according to International Timber (the leading importer and distributor of timber in the United Kingdom) comprises two stages:

• Rough sawing, a process called ‘breaking down.’ ‘Two types of rough sawing can be used in the breaking down the process – through sawn and quarter sawn,’ as mentioned by International Timber.
• Re-sawing, a process including more precise cutting and finishing, such as planning and further machining. For instance, the ends of the logs are trimmed, ensuring they are straight. ‘Large circular saws are then used to further process the boards, removing the curved edges. Each processed piece of wood now looks like a board,’ as explained by International Timber.

 

Seasoning

Seasoning, commonly called drying, is the process of removing excess moisture from the boards.

Kilns or air dryers are used to remove the excess moisture. The boards are stacked in covered areas with space between each stack, allowing air circulation. Lumber dried in kilns usually keeps less than 15 percent moisture while air-dried lumber retains approximately 20 percent moisture.

Lumber seasoning is important because lumber that has not been seasoned, referred to as ‘green wood,’ still has a high moisture percentage. Typically, it is more difficult to work with green wood because it has the characteristic to change shape.

Finally, each finished piece of lumber is graded, bundled with steel or plastic bands, and loaded onto trucks for delivery to lumberyards where the lumber is sold to traders.

 

Trading lumber as a commodity

Figures provided by the Observatory of Economic Complexity (OEC) indicated that sawn wood (lumber) was the world’s 98th most traded product in 2025, with a total trade of US$37.1 billion. In 2025, lumber trade represented 0.22 percent of the total global trade.

Traders or investors who are interested in trading with or investing in lumber as a commodity will need the services, guidance, and trading platform of a trusted, regulated, and registered commodity broker. Such a broker will determine risk appetite, and provide information about trading instruments, allowing the trading of, or investing in, lumber as a commodity.

As is usually the case, adding commodities to a portfolio can help to diversify the portfolio and to lower risk.

 

Trading instruments available to trade lumber are, inter alia:

 

• Lumber futures

Random length lumber futures contracts are traded on the Chicago Mercantile Exchange (CME) Globex electronic platform. Each contract is equivalent to 110 000 board feet (about 260 cubic metres) of lumber.

The pricing unit is in US dollars per 1 000 board feet. The underlying commodity is 2 inches by 4 inches lumber with a length of 8 to 20 feet.

A lumber futures contract is a binding agreement between two parties, agreeing to buy/sell random length lumber at an expiry date in the future with a predetermined price. The expiration months are January, March, May, July, September, and November.

At expiration, the contract is settled by physical delivery. However, traders who do not want to take or make delivery of the lumber, are allowed to roll over to contracts in the next expiration months.

Futures contracts are high-risk and not recommended for novice traders.

 

• Lumber exchange-traded funds (ETFs)

ETFs are financial instruments that trade as shares on stock exchanges in the same way that ordinary shares do.

The following two ETFs invest in companies that have exposure to the lumber industry:

• iSharesGlobal Timber & Forestry ETF
• Ivesco MSCI Global Timber ETF

 

• Shares of forestry companies

There are no public companies that are directly involved in the production of lumber.

However, traders/investors can get exposure to lumber prices when buying shares in forestry companies that own and manage timberlands that grow timber to produce lumber. Examples of these companies are:

• Rayonier Inc, listed on the New York Stock Exchange (NYSE)
• West Fraser, listed on the Toronto Stock Exchange (TSX)
• Weyerhaeuser, listed on the NYSE

 

 

Factors driving the price of lumber as a commodity

There are several key factors that can affect the price of lumber, moving the price up and down. These factors are, amongst other factors:

• Lumber supply

Any disruptions in the production and supply of top lumber-producing countries can affect the price of lumber.

For instance, Russia contributed almost 9 percent of the global production of lumber in 2025. This figure will probably decrease because of the country’s war in Ukraine and the subsequent sanctions imposed by numerous countries on products supplied by Russia.

Other factors like deforestation, forest fires, and drought can also affect the global supply of lumber negatively.

 

• USA and China’s demand

Lumber imports of these two largest consumers of lumber account for 48 percent of global lumber imports – the USA accounting for 27 percent and China for 21% respectively. Any changes in demand in these two countries can certainly influence the price of lumber. An increase in demand will lead to an increase in the price of lumber and vice versa.

 

• Construction and housing data

Lumber is a key component of the housing and construction industry. Hence, lumber prices are typically sensitive to construction and housing reports as they are used as indicators for the construction industry, providing clues regarding the demand for lumber.

 

• Substitutes

Lumber has competing substitutes in the building industry. Building materials like concrete, plastics, and metals, can also be used instead of lumber. If prices of substitutes are lower than lumber prices, demand for lumber can decrease, negatively affecting the price of lumber.

 

• Trade policies

Trade policies – like tariffs, subsidies, and quotas – applied by governments in major lumber-producing and consuming countries can have a significant impact on lumber prices, affecting the global supply and demand levels of lumber.

 

• Strength of the US dollar

The standard for the pricing of lumber as a commodity is the US dollar. A weak dollar compared to currencies of other countries may motivate foreign buyers to buy lumber and boost the lumber demand, increasing prices, and vice versa.

The situation described above occurs because a weak US dollar means foreign currencies are worth more in dollars, enabling buyers with foreign currencies to buy more lumber. However, the opposite is also true, because a strong US dollar implies that buyers with foreign currencies can buy fewer lumber, which can influence the demand negatively.

 

The uses of lumber

Lumber is used in different industries, such as:

• Home construction

Lumber is used in numerous home construction, also referred to as residential construction, projects such as roofing, panelling, making doors, windows, and rafters, trim work, and setting up beams.

Some homes are entirely constructed with lumber alone.

 

• Wood flooring

Lumber is used in the construction of both indoor flooring and outside decks.

 

• Furniture making

Numerous home, office, and school furnishing items are manufactured from lumber. Examples of such items is tables, chairs, desks, beds, nightstands, and shelves.

 

• Kitchen Cabinetry

Kitchen structures for washing, cooking, and storing of food and cooking utensils are mostly manufactured from lumber. The reason is that it makes it easier to incorporate appliances such as stoves, refrigerators, and dishwashers into the kitchen compartments.

 

Seven interesting facts about trees

• Trees get 90 percent of their nutrition from the atmosphere and only 10 percent from the soil.
• The roots of trees grow during autumn (fall), while the foliage and trunk grow in spring and summer, respectively.
• Wood is 400 times warmer than steel.
• Lumber/timber is considered carbon-negative, implying that lumber construction is an environmentally friendly and responsible way to build.
• Trees grow from the top, not the bottom.
• A mature tree produces almost 118 kilograms (260 pounds) of oxygen on average each year, providing enough oxygen for two people.
• Dendrochronology is the science of counting and studying the number of rings on a tree stump, indicating how old the tree is.

 

Note: This article does not constitute investment, financial, or trading advice. Please obtain the advice of a professional and regulated commodity broker before making trading and investment decisions.