More Record-Level Lumber Prices Expected In 2018 From U.S. Import Duties

by | Dec 18, 2017 | News

In WOOD MARKETS’ new five-year softwood lumber forecast, the continuation of U.S. duties on Canadian lumber exports to the U.S. are expected to cause more short-term market and price volatility. The preliminary duties launched earlier in 2017 rocked the U.S. market and more of the same is expected in 2018. As we predicted one year ago, the headline for last year’s WOOD MARKETS 2017 news release was bang on: “U.S. Import Duties on Canadian Lumber to Cause Market Chaos and Soaring Prices.” Indeed, they did. The WOOD MARKETS 2018 Outlook Report predicts more chaos and the chance of further record-breaking prices.

These details and further analysis of commodity lumber and structural panels was released earlier this week in the report, WOOD MARKETS 2018 – The Solid Wood Products Outlook: 2018 to 2022 by WOOD MARKETS/FEA Canada, Vancouver BC.

The recent announcement of final countervailing (CVD) and anti-dumping (ADD) duties on Canadian lumber exports to the U.S. will cause lumber prices to remain near record levels in 2018 and even higher at various points over the next five years. This is because Canadian exports to the U.S. are forecast to ease in 2018.

“Simply put,” indicated Russ Taylor, Managing Director, WOOD MARKETS/FEA Canada, “by restricting incremental Canadian lumber exports via import duties, there may not appear to be enough lumber supplies to adequately balance with projected U.S. demand. There will need to major increases in U.S. lumber capacity (which is starting to build), more offshore imports, and/or record-level prices to stimulate more supply. The question that we have seen coming for a number of years is: Where will the U.S. get all of the lumber it needs, and at what price?”

The impact of U.S. import duties on Canadian lumber production and exports has been developed from building a cost curve of Canadian producing regions from WOOD MARKETS’ Global Timber/Sawmill/Lumber Cost Benchmarking Report. From this, WOOD MARKETS has overlaid a cross-Canada timber supply availability map with delivered log and sawmill costs to determine which producing regions (and mills) are most impacted by 20.23% (“all-others”) import duties.

Read more on this from International Wood Markets at https://www.woodmarkets.com/news-release-record-level-lumber-prices-expected-2018-u-s-import-duties/.

Moody’s: Wood Product Growth Supports 2018 Stable Outlook

by | Dec 13, 2017 | News

The likelihood of strong profits from the wood products business, alongside higher prices and growth in paper packaging from increased e-commerce demand, will help to offset the secular declines in the printing and writing paper segment, says Moody’s Investors Service in its annual sector outlook published recently. As a result, the outlook for the global paper and forest products sector will remain stable in 2018.

“The stable outlook for paper and forest products globally next year is underpinned by an expected 2%-4% growth of our rated paper and forest products companies, as strength in the wood products and paper packaging subsectors offset decreased demand for commodity paper as the shift to digital-first alternatives continues,” says Ed Sustar, a Moody’s Senior Vice President and author of the report.

On a subsector basis, the positive outlook for wood products and timberland is buoyed by improving strong end-market demand for timber, lumber, oriented strand board (OSB) and engineered wood products as US housing starts increase about 6%, or approximately 1.28 million units, in 2018.

Bolstered by the robust demand emanating from the US homebuilding market, average lumber prices are expected to remain strong, with increased production capacity aligning to support the demand, Moody’s says. Nevertheless, analysts caution that the tight lumber markets will allow countervailing anti-dumping duties assessed on Canadian lumber exported to the US to be passed on to consumers. The issuers most expected to benefit from a combination of higher lumber prices and little-to-no lumber tariffs include Potlatch Corporation, Georgia-Pacific, Weyerhaeuser Company and Rayonier Inc.

From Moody’s Investors Service: https://www.moodys.com/research/Moodys-Wood-product-growth-supports-2018-stable-outlook-offsetting-commodity–PR_377021