Timber: Trading
Chicago lumber futures and the mill-to-dealer deal
What this tab covers How and where it is bought and sold: who buys and sells, exchanges and benchmarks, contract types, the big trading houses and how prices are discovered.CME lists a physically delivered softwood lumber future in Chicago, relaunched in a smaller contract size after liquidity problems. Most lumber still sells in mill-to-dealer deals priced off reporting services such as Fastmarkets' Random Lengths. Pulp has a bleached softwood kraft future on the Shanghai Futures Exchange, while contract prices reference Fastmarkets indices such as FOEX and RISI. Tropical hardwoods trade by species and grade with no exchange. Many forest companies run forests, sawmills and pulp mills together, so chips move inside firms rather than through markets.
Where it is bought (buyers)
- US builders and dealers buy Canadian and US softwood lumber (US 23.1% of world sawnwood import value in 2024)
- Chinese importers buy logs and lumber from Russia, New Zealand and Europe (China 20.2% of sawnwood and 42.1% of pulp import value)
- Indian importers buy teak and hardwood logs, radiata pine and sawn timber through Kandla and other ports (1.5% of sawnwood import value)
Where it is sold (sellers)
- Canada (21.3% of sawnwood export value in 2024), Sweden (12.3%), the US (8.7%), Germany (8.3%), Finland (6.6%) and Austria (5.4%) (UN Comtrade)
- Brazil (28.2%), the US (15.0%) and Canada (11.1%) sell pulp
- New Zealand, Brazil and African countries sell logs to India and China
Exchanges and benchmarks
| Venue | Contract | Notes |
|---|---|---|
| CME Group | Lumber futures, 27,500 board feet | the main timber futures; physically delivered |
| India | none | no timber futures; forest department auctions and importer prices set the market |
Contract types
- Spot and short-term mill-to-dealer sales priced off weekly Random Lengths assessments
- Long-term pulpwood and sawlog supply agreements with landowners
- Log export cargoes sold CFR China or C&F Indian ports per Hoppus or JAS m3
Top trading houses
- Japanese trading houses (Sumitomo Forestry, Itochu)
- Timber importers and agents in Gandhidham and Chennai
How prices are discovered
- CME lumber futures
- Fastmarkets Random Lengths framing lumber composite
- ITTO Tropical Timber Market Report
- World Bank Pink Sheet sawnwood and logs