{"id":77611,"date":"2019-06-18T12:04:57","date_gmt":"2019-06-18T12:04:57","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/canada-softwood-lumber-industry-caught-trade-disputes-climate-change\/"},"modified":"2025-09-19T08:50:58","modified_gmt":"2025-09-19T08:50:58","slug":"canada-softwood-lumber-industry-caught-trade-disputes-climate-change","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/canada-softwood-lumber-industry-caught-trade-disputes-climate-change\/","title":{"rendered":"Canada: Softwood lumber industry caught between trade disputes and climate change"},"content":{"rendered":"
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The Canadian softwood lumber industry has to handle two of the biggest challenges in its history: the trade disputes and climate change. As a result of this struggle, companies in British Columbia have already cut back shifts and closed sawmills, due to a lack of log supplies and lower prices.\u00a0<\/strong><\/em><\/p>\n

The high log costs in B.C., caused by a lack of logs supply due to the bark beetle infestations and wildfire seasons, resulted in record high lumber prices, which plunged in the fall of 2018. This caused\u00a0temporary mill shutdowns, with more to come in the next period, if the prices don't recover.<\/p>\n

Interfor announced it\u00a0would cut back on operations for June, joining in the temporary curtailments already rolled out by Canfor and West Fraser. Also, Tolko closed its mill in Quesnel, once with a shift at its Kelowna mill<\/p>\n

<\/span>BMO analyst Mark Wilde calculates that the combined cuts add up to about 500 million board feet or some 0.8 per cent of North American annual lumber production, which he said is wholly inadequate to deal with the lack of raw log supply and the \"very ugly<\/em>\" market.<\/p>\n<\/div>\n

Prices were never expected to stay at the highs of last summer, but they're now less than half of where they peaked as lower-than-expected U.S. housing starts keep prices down. The slow housing market has been blamed on extremely wet weather, which the U.S. government said was the rainiest May to April since records began in 1895.<\/p>\n

Meanwhile the warmer, drier weather in Western Canada could also be contributing to spruce bark and Douglas-fir beetle infestations, said Russ Taylor, managing director at Forest Economic Advisors Canada, while a wildfire currently burning near High Level, Alta., has forced Norbord Inc. and Tolko to close nearby mills.<\/p>\n

\"It is weather, and everyone's been blaming weather on and on and on, but it's still weather...There's just stuff going on all over the place, a lot of it's tied to climate change<\/em>,\" he said.<\/p>\n

The pressures on raw log supplies in B.C., which will increase under efforts to protect woodland caribou, mean the province will likely lose 12 mills in the next decade according to a report commissioned by Forest Economic Advisors Canada.<\/p>\n

Rising government-set log fees coming July 1 will add further cost pressure to an industry dealing with low lumber prices, said RBC analyst Paul Quinn.<\/p>\n

At the same time, Canada's industry has been struggling under U.S. softwood tariffs imposed in 2017.\u00a0Taylor estimates that the tariffs, which average about 20 per cent, push mills in B.C. and Quebec from about a break-even point to a negative 15 to 20 per cent loss.<\/p>\n

Moody's Investor Service analyst Ed Sustar said the duties are taking a bite now that prices have fallen so much.\u00a0\"It's more major now that prices have compressed. That 20 to 25 per cent tariff, that's real cash that each company has to pay on all their exports, so that's definitely hurting, especially B.C.<\/em>\"<\/p>\n

In the last major round of softwood tariffs in the early 2000s the companies got back about 80 per cent of duties back, but the dispute took five years to resolve, said Sustar.\u00a0\"We're only into this for two years now, it could take another couple of years before another softwood lumber agreement gets signed<\/em>.\"<\/p>\n

The U.S. South has lots of log supplies after a lack of harvesting after the housing crisis, and government incentives to plant trees, which is attracting some two to three new mills a year.<\/p>\n

Analysts expect prices to recover somewhat next year, but trade and supply issues means Canada's share of the U.S. market will continue to dip lower, said Sustar.<\/p>\n<\/div>\n

<\/h2>","protected":false},"excerpt":{"rendered":"

The Canadian softwood lumber industry has to handle two of the biggest challenges in its history: the trade disputes and climate change. 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