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

BC Housing working quickly to redesign Kelowna project for the homeless

They are working on “improving the appearance of the building, including landscaping.”

Bed and Breakfast won’t return to Lake Country

After burning down in July, the owners are selling the A&S Lakeview property

Suspect identified in brazen daytime robbery

The suspect is 32-year-old Dale Christopher MacPherson of Peachland

Kelowna-developed app brings static images to life

Maxogram links static images to video for a whole new take on marketing and information

The Okanagan may not get snow for Christmas

You may not want to bet on having a White Christmas

Me Too At Work: Sexual assault and harassment in the B.C. workplace

Introducing an in-depth look at who is affected and what can be done

B.C. children adoption rates lagging, despite increased funding: watchdog

More than 1,000 children children are still waiting to be adopted, new report shows

Hurdles ahead for Sicamous off-road vehicle bylaw

RCMP, ICBC and province not yet on-board with district

FortisBC to lower natural gas rates in 2018

Rate changes to impact the Lower Mainland, Kootenays, Interior and Vancouver Island

DeHart: New downtown stop for unique beer and wine products

Kelowna hotelier Maxine DeHart takes a look at the local business scene in her weekly column

Visit with Santa amidst the Big White snow

Snow lovers can head up to Big White this month to visit with Santa

Four-month-old baby girl critically injured in Toronto

Baby, a man and a woman in serious condition

Google searches suggest 2017 a tough year

What were Canadians were curious about: Google searches suggest 2017 a tough year

Democrat wins stunning red-state Alabama Senate upset

Democrat Doug Jones wins stunning red-state Alabama Senate upset against Roy Moore

Most Read