Logout
Click here for Pulp & Paper Radio International
The Paperitalo Library
Free Downloads
Search
My Profile
Login
Canadian Mills' Woes Drive Up Lumber Prices
Print
CANADA (From news reports) -- Beetles, tariffs and mill closures have cut into Canada's share of the U.S. lumber market, lifting prices by about a third over the past year and shifting even more logging to the U.S. Southeast.
About two billion board feet of annual lumber production has been curtailed by mills in British Columbia, much of it permanently. That equates to about 5% of North American lumber cutting capacity, according to Raymond James analysts.
British Columbian mill owners have cited trouble obtaining logs at desirable prices due to wood-boring beetle infestations, harvesting restrictions related to caribou habitat and tariffs on softwood imports into the U.S.
There is also stiff competition from the U.S. South, the continent's other major logging region, where a historic glut of ready-to-fell trees has depressed prices and prompted a surge in new saw mill construction. Among those building up sawing operations in the south are Canadian companies Canfor Corp. , Interfor Corp. and West Fraser Timber Co.
This year's mill closures in British Columbia have punctuated a longer trend of falling U.S. market share for Canadian timber, said Brooks Mendell, chief executive of Forisk Consulting, which advises timber investors. Over the past decade, Canadian softwood lumber production capacity has shrunk to roughly 28 billion board feet a year from about 38 billion board feet, Mr. Mendell said.
"Basically a quarter of Canada's ability to produce softwood lumber has come off the market," he said. "When Canada shrinks, it leaves more business for U.S. based producers."
Among the beneficiaries, he said, should be Weyerhaeuser Co. , which reported third-quarter earnings on Friday. The Seattle-based company has roughly 7 million acres of Southeastern timberlands, several mills and export terminals in Louisiana and the Carolinas.
Weyerhaeuser Chief Executive Devin Stockfish told investors Friday that as new mills open in the South, prices for timber around them are rising, albeit slowly. In all, he said, mills with capacity to produce 5.5 billion board feet a year are being built in the South, as well as facilities that turn trees into pulp for paper and cardboard.
Keeping prices in check: soggy weather in some Southern markets disrupted home building in places such as Nashville and Dallas earlier this year and President Trump's trade dispute with China limited exports from the region, he said.
Lumber futures for November delivery settled up 0.3% to $402.10 per 1,000 board feet on the Chicago Mercantile Exchange on Friday, a 10% climb so far this month and 30% over the past year. The futures price is also about 5% higher than spot lumber prices in markets both in the Northwest and the Southeast, according to pricing service Random Lengths.
The higher future price indicates optimism among traders that inventory flushed from mothballed mills has been absorbed and that the home-building season will extend deeper into autumn.
"Our builder customers tell us their demand continues to improve and they intend to maintain strong building activity until winter weather no longer permits," Mr. Stockfish said.
****

Onlypulpandpaperjobs.com has taken off like a rocket! Over fifty jobs are posted, in many interesting categories. These jobs are in at least ten different US states. [12.19.19]

****

Employers are on board with Onlypulpandpaperjobs.com. There are nearly thirty employers located in fifteen different US states and two other countries. [12.19.19]

 

Related Articles:


Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: