For the Quarter Ending September 2025
North America
• In the United States, the Softwood Lumber Price Index rose quarter-over-quarter in Q3 2025, driven by rising production costs.
• Softwood Lumber production costs increased due to rising pine sawtimber prices and logging labor constraints in Q3 2025.
• Demand outlook was mixed, with housing starts declining and consumer confidence falling in Q3 2025.
• The Producer Price Index increased 2.6% year-over-year in August 2025, indicating higher input costs for lumber manufacturing.
• Consumer Price Index rose 3.0% year-over-year in September 2025, impacting purchasing power; unemployment was 4.3%.
• Industrial production showed near stagnation at 0.1% year-over-year in September 2025, limiting industrial demand.
• Strong retail sales, up 5.42% year-over-year in September 2025, supported home improvement demand.
• US natural gas prices strengthened in Q3 2025, contributing to increased energy costs for Softwood Lumber production.
Why did the price of Softwood Lumber change in September 2025 in North America?
• Rising pine sawtimber prices and logging labor constraints increased Softwood Lumber production costs.
• Weakening consumer confidence and declining housing starts dampened Softwood Lumber demand in Q3 2025.
• The 2.6% year-over-year PPI increase in August 2025 raised input costs for lumber producers.
Europe
• In Germany, the Softwood Lumber Price Index rose quarter-over-quarter in Q3 2025, driven by surging feedstock costs.
• Timber and logging product costs trended upward July-September 2025, impacting sawmill profitability.
• Elevated European natural gas and German electricity prices boosted energy-related production costs in Q3 2025.
• Industrial production declined 1.0% in September 2025, and the Manufacturing Index contracted in Q3, signaling weaker demand.
• Despite weak construction, apartment building permits surged in September 2025, offering positive demand signals.
• Sawmill inventories were actively managed in Q3 2025, preventing overhang amidst significant production cuts.
• CPI increased 2.4% in September 2025, suggesting rising operational expenses, while PPI decreased 1.7%.
• Retail sales rose 0.2% in September 2025, unemployment stable at 6.3%, indicating stable consumer activity.
• Softwood Lumber Price Forecast: Upward price pressure is anticipated due to persistent cost increases and supply constraints.
Why did the price of Softwood Lumber change in September 2025 in Europe?
• Timber and logging costs surged July-September 2025, increasing production expenses.
• German softwood lumber production faced significant cuts in Q3 2025, tightening market supply.
• Elevated European natural gas and German electricity prices contributed to higher energy costs.
APAC
• In China, the Softwood Lumber Price Index fell quarter-over-quarter in Q3 2025, driven by weak consumer demand and manufacturing contraction.
• China's real estate sector experienced continued contraction in Q3 2025, significantly weighing on Softwood Lumber demand.
• Softwood log prices remained elevated in Q3 2025, contributing to margin pressure for sawmill operations.
• Softwood log inventories in China saw a month-on-month increase in July 2025, indicating ample supply.
• China's cumulative timber imports declined year-on-year for the first nine months of 2025, impacting trade flows.
• Deflationary pressures, with CPI falling 0.3% and PPI declining 2.3% in September 2025, signaled weak demand.
• The Manufacturing Index was contracting in September 2025, signaling reduced new orders and production activity.
• Industrial production expanded by 6.5% year-on-year in September 2025, offering some counter-balance to demand.
• Consumer confidence remained pessimistic at 89.6 in September 2025, dampening discretionary spending on housing.
Why did the price of Softwood Lumber change in September 2025 in APAC?
• Weak consumer demand, evidenced by a 0.3% CPI fall in September 2025, reduced spending on housing.
• Manufacturing Index contraction in September 2025 led to lower industrial demand for raw materials.
• Elevated softwood log prices in Q3 2025 increased production costs, impacting overall market dynamics.
