Lumber and panel traders across North America abandoned their desks this week to descend upon the annual North American Wholesale Lumbermen's Association meeting, this year in Las Vegas, NV, writes Keta Kosman in Madison’s Lumber Reporter. www.madisonsreport.com
Skeleton crews left behind to handle the phones reported a quiet week but there was enough inquiry, and sales follow-through, to pop the price of benchmark dimension lumber item WSPF KD 2x4 #2&Btr by $2, to US$364 mfbm.
The big news of course was the late-day Thursday announcement of two major sawmill closures in British Columbia, slated for next spring. Lumber futures on the Chicago Merchantile Exchange promptly responded by going up-limit ($10) in after-hours trading, to US$361.40 for the November contract.
Canfor Corp. (TSX: T.CFP, Stock Forum) and West Fraser Timber Co. Ltd. (TSX: T.WFT, Stock Forum) made public plans to each close one sawmill in mountain pine beetle (MPB) affected affected areas of BC, however it is the tenure swap part of the agreement which is of most interest. Canfor will permanently close its modern sawmill located in Quesnel, BC, likely in March, 2014.
For its part, West Fraser's will close its flagship mill in Houston, BC, in 2Q 2014 the company said late Thursday, and embark on significant investments in two major mill upgrades in Smithers and 100 Mile House, BC.
In an effort to consolidate remaining timber supply, West Fraser has exchanged a portion of its existing timber harvesting tenure in the Morice Timber Supply Area (TSA) for Canfor's tenures located in the Quesnel and Lakes TSAs.
Industry watchers can expect more such news to come out of BC in the future as the restricted fibre supply due to the MPB becomes more of a reality.
Expectations are of a similar such move looming between Interfor International Forest Products Ltd. (TSX: T.IFP.A, Stock Forum) and Tolko Industries Ltd.
Elsewhere, Revenue Canada announced that lumber prices have once again passed the threshold and the export tax on Canadian wood crossing the US border will be reduced to the minimum o November 1. For BC and Alberta this means no tax.
Meanwhile, the US Lumber Coalition held an open information session at the University of British Columbia, in Vancouver, this week. The 2006 Softwood Lumber Agreement has already been extended once, and now expires in October 2015.
Trade officials from the US and Canada will be in discussions of the current agreement, as well as future plans.
In labour news, the United Steelworkers and employers' group the IFLRA met for two days this week in BC with no resolution. Talks are next scheduled for November 2. Concern is growing that some kind of labour action, on the part of either party, might come into effect soon. IFLRA member companies include Tolko, West Fraser, and Weyerhaeuser.
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Keta Kosman
Publisher
Madison's Lumber Reporter
604 984-6838
www.madisonsreport.com