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

Heavy snowfall for Coquihalla

Kelowna - Snowfall is expected to continue on the highway until Sunday

Serious injuries sustained in Peachland collision

Both drivers were send to hospital yesterday after a head-on collision

Kelowna, Lake Country boarders hit B.C. Games podium

At the Kamloops BC Games, Big White boarders Central Okanagan boarders win medals

Feds provide more financial help for students

Kelowna-Lake Country MP announces changes to student grants program

Victory lap to honour Serwa

Big White Ski Resort did a victory lap to honour the skier who won gold in the Olympics

What’s happening

Check out what is happening this weekend in the Okanagan-Shuswap.

Czechmate: Canada wins men’s Olympic hockey bronze

Vernon’s Andrew Ebbett scores twice as Canada beats Czech Republic 6-4

Canucks fold 5-3 in first ever trip to Vegas

Daniel Sedin had two points as Canucks fall to the Golden Knights Friday night

That’s a wrap: B.C. Games results after Day 1

Vancouver-Coastal Zone 5 is in the lead for medals Friday at the Kamloops 2018 B.C. Winter Games

Penticton rally set for Indigenous homicide victims

Rally in support of Colten Boushie and Tina Fontaine set for Monday at noon at the courthouse

Familiar faces head up library board

The executive of the Okanagan Regional Library board remains the same

Sticking the landing at the B.C. Games

Gymnasts talk competition, B.C. Winter Games, and teamwork in Kamloops

Therapy dogs make appearance at B.C. Games

The St. John’s Ambulance therapy dog program launches a pilot project at the 2018 Kamloops B.C. Winter Games

$153M in federal cash to fund child care, education training in B.C.

Bilateral agreement will create 1,370 new infant and toddler spaces

Most Read