This year, the U.S. has imposed an additional 6.76 per cent duty on Canada’s smaller lumber companies. (Ezra Black/The Free Press)

Lumber prices see ‘big jump’ after wildfires in B.C.

As early as Sunday, several companies temporarily closed some of their mills as evacuation orders

The wildfires in the B.C. Interior that have forced some sawmills to halt operations have resulted in a boost in lumber prices at a time when forestry companies have been squeezed by softwood duties on exports to the U.S.

By Wednesday, the benchmark price of Western spruce-pine-fir lumber had risen by 5.5 per cent to US$400 per thousand board feet from US$379 last Friday, according to figures from Random Lengths, which tracks lumber and panel prices.

“It’s a big jump,” said Shawn Church, Random Lengths editor.

Ketan Mamtora, an analyst with BMO Capital Markets, said he expects prices will rise between six and eight per cent over the next couple of weeks, partly due to a limited supply.

As early as Sunday, several companies temporarily closed some of their mills as evacuation orders, displaced employees, road closures and other factors made operations impossible or difficult.

It’s possible for the industry to increase capacity at other facilities, but Mamtora said it’s unlikely they can make up for all lost production. Fear over possible lumber shortages also “really pushes up the prices,” he said.

If the fires persist for a long time, that will have “a much more meaningful impact on pricing,” Mamtora added.

RELATED: Province will buy lumber to protect mills: Clark

In the case of mills staying shut for months or even sustaining damage, he estimates prices could rise between 15 and 17 per cent.

But Harry Nelson, an assistant professor of forestry at the University of British Columbia, said essentially the province’s entire production would have to be wiped out for such a spike to occur.

“At the end of the day, whatever hole these wildfires create gets filled in somewhere else,” Nelson said.

For weeks, Canada’s softwood lumber industry has been hit by U.S. duties, and companies operating in B.C. have been hit particularly hard.

On average, the lumber industry faces tariffs of 27 per cent. But West Fraser Timber (TSX:WFT), Canfor (TSX:CFP) and Tolko, all of which are headquartered in the province, have been charged duties of 31, 28 and 27 per cent, respectively.

The short-term lift in prices is good for producers, Nelson said, as it means more money in their pockets after tariffs are paid.

Aleksandra Sagan, The Canadian Press

Just Posted

Lack of security: why Vancouver Island food production is on the decline

Big Read: agriculture a big, expensive commitment as advocates push to make us more food secure

Coroners office investigates death of Victoria-area teen

Investigation involves ‘male teenager’, confirmed student at Oak Bay high

UVic team revved up for international competition

Students geared up for Formula Hybrid April 30 to May 3 at New Hampshire Motor Speedway

Greater Victoria Teachers’ Association joins counter-protest

GVTA released statement of support for LGBTQ in response to upcoming protest

WATCH: Topaz Park open house scheduled for Saturday

This will be the final stage of public engagement for park design

Lt.-Gov. Guichon believes she made the right decision

Outgoing Lt.-Gov Judith Guichon said her most memorable moments weren’t surrounding the election

Saanich Mayor Atwell recommends fall referendum on future amalgamation talks

A Saanich councillor applauds the possibility of a referedum on whether Saanich… Continue reading

Spring Home Show this weekend in Colwood

West Shore Parks and Recreation will be transformed to showcase everything home related

VIDEO: Smokers talk pot rules at annual 4-20 event

Annual pot protest-meets-festival in Vancouver attracted hundreds to vendors, concert

Saanich’s Shew sisters win gold, silver at national wrestling championships

Kiana, 17, won gold while Zena, 14, won silver at nationals

New funds, recruits set to alleviate B.C. sheriff shortage

The Government of British Columbia announced new sheriff graduates, funding for more classes

Video: RCMP investigation gets a deer little photobomb

Princeton RCMP were conducting a drug investigation in Princeton which a deer strolled through

Farnworth says five years too long for feds to deal with organized crime in medical pot

Needs to be dealt with much sooner than that, B.C. Public Safety Minister says

UPDATED: Unions, CP Rail come to agreement, avoiding work stoppage

Locomotive engineers, conductors and signals specialists seeking new collective agreements.

Most Read