Timber: Cycles

A surprisingly steady price for tropical sawnwood

The World Bank series is Malaysian tropical sawnwood. It was $731 per cubic metre in September 2026, close to $736 a year earlier and $749 five years ago. The ten-year range was narrow, $615 to $792, against a record of $974 since 2000. In real 2010 dollars the price fell from $848 in 2010 to $619 in 2025. North American softwood lumber is far more volatile. Housing starts drive demand, mill capacity adjusts slowly, and the pandemic building boom pushed futures to records. Wildfires and beetle kills cut supply.

Sawnwood, Malaysian price

Chart: Sawnwood, Malaysian monthly price

Chart: Sawnwood, Malaysian annual real price

Super-cycles in timber

Timber prices move with housing and construction cycles, oil (through freight and substitute costs) and supply shocks such as log export bans. The World Bank Malaysian sawnwood price rose from $171/m3 in 1972 to $396/m3 in 1980, jumped in 1993-1994 when tropical log exports were curbed, and peaked at $974/m3 (monthly) in Aug 2011. Since then it has drifted; in real 2010 dollars it fell from $848/m3 in 2010 to $619/m3 in 2025. North American softwood lumber has its own sharper cycle, driven by US housing starts and trade disputes with Canada. Wood is renewable, so long-run real prices are capped by the ability to plant more trees.

1. 1972-1980

   The general commodity boom and oil shocks raised freight and building costs, and strong construction demand lifted wood prices.

   Malaysian sawnwood annual average from $171/m3 (1972) to $396/m3 (1980); Malaysian logs from $41/m3 to $196/m3 (World Bank)

2. 1992-1994

   Malaysia's states restricted raw log exports to support local mills, while logging cuts in US Pacific Northwest forests to protect habitat tightened softwood supply.

   Malaysian logs annual average from $210/m3 (1992) to $390/m3 (1993), monthly peak $521/m3 (May 1993); sawnwood monthly peak $885/m3 (Aug 1994) (World Bank)

3. 2008-2011

   Chinese construction and stimulus spending drew in logs and lumber from around the world as the US housing market collapsed.

   Malaysian sawnwood all-time monthly peak $974/m3 (Aug 2011); Malaysian logs $454/m3 (Sep 2011) (World Bank)

4. 2020-2026

   North American lumber spiked in 2020-2021 on pandemic home building and renovation, then fell back; tropical prices barely moved. US duties on Canadian lumber rose in 2025 and Chinese demand weakened.

   Malaysian sawnwood peaked at only $767/m3 (May 2021); Malaysian logs fell to $183/m3 (Jul 2026); Southern yellow pine averaged $420 per thousand board feet in Q2 2025 (World Bank; Interfor)

What drives the cycle

• US and Chinese housing construction. The US and China together import 43% of world sawnwood by value; their building activity sets demand.
• Interest rates. Mortgage rates drive US housing starts, the most watched demand indicator for softwood lumber.
• Supply shocks: beetles, wildfire and harvest rules. Pine beetle damage and fires in British Columbia, and logging limits, cut Canadian sawmill capacity.
• Trade policy. US duties on Canadian softwood, Russian export bans on logs and tropical log export bans redirect trade and raise prices.
• Legality and deforestation rules. EU and US due-diligence laws raise costs for tropical timber and favour certified supply.

Metrics to track