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/.

Shrinking Timber Supply Sends B.C. Companies On U.S. Mill Buying Spree

by | Feb 27, 2015 | News

At first blush, year-end financials and stock prices for B.C.’s largest forest companies would suggest the province’s forestry sector is well on the road to recovery after a decade-long slump.

Interfor Corp., for example, posted record sales of $1.4 billion in 2014 and record production of 2.2 billion board feet. Stock values and market caps of B.C.’s three largest forestry companies – Interfor, Canfor Corp. and West Fraser Timber Co. Ltd. – have soared since the end of 2011. Canfor’s share prices have increased almost 180%, West Fraser’s more than 220% and Interfor’s a whopping 410% since the end of 2011. Based on market cap ($6 billion), West Fraser is now B.C.’s seventh-largest publicly traded company.

But that increase in production and stock value is largely attributable to recent acquisitions of sawmills in the U.S., not to a boom in their B.C. operations. In fact, Canfor and Interfor have both closed mills in B.C. in recent years. Warmer winters that led to a massive die-off of pine from the mountain pine beetle infestation are largely to blame.

B.C.’s largest forestry company, West Fraser, now owns 15 American sawmills, compared with just seven in B.C. and five in Alberta. About 36% of its shipments of lumber now come from its U.S. mills, said Rodger Hutchinson, West Fraser’s vice-president of investor relations. Interfor owns five sawmills in B.C., nine in the U.S. and will add another four U.S. mills this year. About 43% of Interfor’s current production capacity is in B.C., 57% in the U.S. Canfor owns 12 sawmills in B.C., one in Alberta and 10 in the U.S. It also owns four pulp mills in B.C., one wood bioenergy plant in Alberta and one in B.C.

From Business Vancouver: https://www.biv.com/article/2015/2/shrinking-timber-supply-sends-bc-companies-us-mill/