Canadian Softwood Duty Cut; Australia Plywood Imports Hit Record

Canadian Softwood Duty Trim and Australian Volume Surge

The U.S. Department of Commerce moved on 14 April to lower preliminary anti-dumping and countervailing duties on Canadian softwood lumber to 24.83% — down from the prior 35.16% combined rate — in the seventh annual administrative review. According to the Federal Register, the new rates set anti-dumping at 10.66% (was 20.56%) and countervailing at 14.17% (was 14.63%) for calendar-year 2024 imports. Final determinations are expected in late August 2026, with new rates taking effect in late summer.

The relief, however, is partial. The National Association of Home Builders notes that combined with Section 232 tariffs that took effect under presidential proclamation, Canadian softwood faces an effective rate near 34.83% once the 10% timber tariff is layered on. For procurement teams that had been pricing in a 35-plus combined burden, the move trims roughly 10 percentage points of duty cost on Canadian shipments — a meaningful but not transformative shift for North American buyers.

Lumber Stuck in a Demand Trough

Lumber futures finished the week of 24 April at $582.50 per thousand board feet, near a one-month low, according to Trading Economics. IndexBox attributes the soft tape to a 14.2% collapse in U.S. single-family housing starts and a 5.4% decline in building permits — the same combination of signals already flagged in our mid-April brief — with mortgage rates holding at 6.46%.

One nuance buyers should note: in the cash market, supply discipline is starting to firm. IndexBox reported that for the week ending 3 April, Western Spruce-Pine-Fir 2x4 lumber rose to $490 per thousand board feet, up about 1% week-over-week and 4% month-over-month, with offshore plywood imports declining and helping keep panel markets balanced. The futures-cash divergence suggests that headline lumber prices may understate underlying tightening, especially if Canadian shipments slow ahead of the August final determination.

Australia Crosses 500,000 m³ in Plywood Imports

Australia has emerged as the unexpected demand story of the spring. According to Wood Central and industry data covering the 12 months ending January 2026, Australian plywood imports reached 503,562 cubic metres — the first time the country has crossed the half-million mark and a 21.8% increase year-over-year. January alone delivered more than 56,000 cubic metres, an unusually strong reading for what is normally a slow construction month.

China supplied 43.8% of Australia's $3.011 billion wood product import bill in calendar 2025, with plywood, LVL, and glulam combining as the single largest category at $792.8 million. The volume tells a structural story: domestic Australian manufacturing capacity is not keeping pace with formwork, residential, and infrastructure demand, and dwelling approvals remain below the national 1.2-million-home target. For Southeast Asian exporters of film-faced plywood, the redistribution opens a credible alternative to U.S.-bound volume that is increasingly burdened by tariff exposure.

Asia-Europe Freight Eases After Hormuz Spike

Ocean freight rates on the Asia-Europe trade lane, which spiked earlier in April on Strait of Hormuz tensions, have started to ease. Freightos reported that Asia-Europe spot rates slid in the week ending 21 April even as Middle East risk premiums persisted, and the Drewry World Container Index fell to $2,232 per 40-foot container as of late April, with the Shanghai-Genoa lane down 3% week-over-week to $3,420 per FEU. Drewry attributes the softening to weak seasonal demand and excess vessel capacity outpacing carriers' attempts to hold rates.

Bunker adjustment factors and war-risk surcharges still add 10-20% on certain headhauls, and Red Sea reroutings continue to absorb steaming days. But the headline trend matters for plywood importers: a calmer freight environment improves landed-cost predictability for European and Mediterranean buyers locking in second-quarter purchase orders.

Vietnam Watches the July Hearing Calendar

Vietnamese plywood exporters are entering the most consequential window of 2026. The U.S. International Trade Commission has scheduled the final-phase hearing on hardwood and decorative plywood from China, Indonesia, and Vietnam for 16 July, with the Department of Commerce's final anti-dumping determinations for Indonesia and Vietnam expected around 13 July, per the Federal Register. Preliminary AD rates ran 187.27% on China, 19.98–84.94% on Indonesia, and 196.14% on Vietnam, with countervailing duties layered on top.

Whether those preliminary numbers survive the final review will define export economics for hundreds of mills across the region. In the meantime, Vietnam's broader wood and wood-products sector is targeting $18–19 billion in 2026 exports, building on the $17.2 billion delivered in 2025. The Ministry of Agriculture and Environment has emphasized continued diversification toward EU, UK, Middle East, and Australia/Oceania channels — a strategy already visible in the import data above.

UK Construction Loses Ground; China Demand Stays Soft

Two demand-side signals for buyers tracking second-quarter conditions. In the UK, the Office for National Statistics reported that construction output fell 2.0% in the three months to January 2026 — the fourth consecutive quarterly decline — driven by a 6.3% drop in private new housing. ICAEW's Q1 Business Confidence Monitor put construction sector confidence at -8.6, and Glenigan recorded project starts down 6% on the prior three months and 20% below 2025 levels. The government's launch of the National Housing Bank on 31 March, including a £100 million joint venture with Aviva, is intended to seed recovery, but housebuilders including Crest Nicholson have already trimmed unit forecasts.

In China, USDA's Foreign Agricultural Service expects wood-product imports and exports both to decline in 2026 on weaker domestic real estate and softer U.S. furniture demand. Real estate investment fell 11% year-on-year across January-February, and floor area of new commercial housing sales dropped roughly 14%. The combined picture: demand from the world's largest construction market is unlikely to absorb significant additional regional supply this year, reinforcing the importance of Australia, GCC, India, and EU corridors for exporters reallocating away from the U.S.

Outlook

The late-April 2026 picture is one of selective rebalancing rather than aggregate movement. Canadian softwood gets a partial duty break that may pull some North American volume forward; Australian importers pull harder than expected on Southeast Asian supply; Asia-Europe freight rates ease after a brief Middle East-driven spike; and Vietnamese exporters wait on a July hearing that will define U.S. economics for the rest of the year. Trading Economics models lumber recovering modestly toward $587 per thousand board feet by quarter-end, but the more important question for plywood-specific buyers is allocation, not headline price. With UK and China demand soft and U.S. tariff exposure unresolved, Q2 supply is concentrating where construction activity is firmest — Australia, GCC, and select EU markets — and buyers in those corridors should expect firmer pricing and longer lead-time conversations through summer.