RE:sector news. The biggest part of this article is nothing but popaganda in relation to actual cause.of BC's lumber slow down. Tariffs have been levied on Canadian imports for decades and the mills still operated. . Tariffs I recal were levied not long after John Diefenbaker devalued and pegged the Canadian $ at 92 cents US. He did so to give canada a price advantage in the US market.. Trying to lure companies to build in Canada rather than the US Since Y2K only one year was tariff free when the agreement negotiated by Harper expired.
Beetle wood was allowed harvested in addition to Normal AAC. So new mills were built to habndle the added volume. Now that beetles are mostly contained or have ran it's course. The overcut has been discontinued. and it is back to previous AAC levels and mills are being closed because the additional volume cut has been recinded. The permnant mill closures and the beetles are the same entity. Not a separate issue as implied..
" British Columbian mill owners have cited trouble obtaining logs at desirable prices due
to wood-boring beetle infestations, harvesting restrictions related to caribou habitat"
This is because of government policy levies and stumpage. Greedy government raised
the prices NOT beetles or the Caribou. They have both of these in Alberta to. But Alta.
charges $345 a truckload of logs stumpage, BC Government charges $2500. And they
wonder why BC mills are closed ?
Canadian mills now own over 20% of lumber production in the southern states Not counting the two southern mills owned privately by TOLKO the two owned by Conifex or Westerns US manufacturing facilities. And the trend will continue. Timber in the US is bought on the open market not by government lisence or Quota. When lumber falls they simply pay less for logs, When Lumber is high, Log price goes up due to bid competition.
BC's Government' is simply not smart enough to comprehend this or the advantage in keeping people working by changing the approach to stumpage like other areas.
Futures Vs spot price; If a person pays attention to Futures you will see the price three months out is always high and normally drops as it gets closer to real time. And futuer pricing can fuluctuate up to $50 in a single day depending on news.
Friday 10 / 19 / 2019;
Close High Low | Lumber | Nov 19 | 402.90 | 408.80 | 385.75 | |
Spot price for the day was $403
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The artical as related to BC sawmills for the most part was nothing but
ramblings from some paid writer. Thousands of miles away, who has
probably never worked or seen a mill or logging operation in realtime. Let
alone managed one