Lumber yard at Babine Forest Products, near Burns Lake, B.C. (File)

Closed mills, housing surge support a positive forecast for lumber industries

B.C. lumber producers have closed mills accounting for 18% of province’s capacity, RBC report says

Financial analysts say Canadian production cutbacks and a consumer-driven recovery in housing starts in the U.S. could mean better times for lumber and panel products this year.

In a research report, RBC analyst Paul Quinn estimates B.C. lumber producers have permanently closed mills accounting for 18 per cent of the province’s capacity, a move that is expected to help to bring North American supply in line with demand and support price increases.

He adds the closure of three oriented strandboard mills and part of another has removed about 9.5 per cent of North American OSB capacity.

RBC is forecasting that U.S. housing starts will increase by about 2.5 per cent this year to 1.3 million units, driven by strength in single-family housing, and there will be further gains in lumber demand from the adoption of “mass timber” methods which allow construction of taller wooden buildings.

Meanwhile, CIBC analysts are also bullish on the lumber sector in North America, given stronger housing starts this year and their estimate of a five per cent decline in supply from last year.

In a report, they say they expect a robust spring selling season, with lumber prices and producer share prices likely to rise.

“2019 was one of the worst years in memory for lumber and OSB companies, with most reporting significant declines in profitability and seeing their equity value deteriorate,” noted RBC’s Quinn.

“However, a number of positive developments have us feeling increasingly bullish.”

The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Age requirement for firefighters in Salmon Arm lowered

Three-month probation period replaced by longer recruit training

Shuswap dragon boat team honours Terry Fox in its own way

Close to $1,000 raised on the 40th anniversary of the Marathon of Hope

Theft-related charges in Salmon Arm deliver accused 140 days in jail

Man sentenced must also stay away from 10th Street SW and two local businesses

Okanagan College expands ‘Wellness Wednesdays’ to all students this fall

Wellness Wednesday workshops are designed to be psycho-educational

Fuel Good Day pumps up North Okanagan-Shuswap charities

Cheques for more than $2,500 handed over to three organizations in annual fundraiser

B.C. reports 96 new COVID-19 cases, one hospital outbreak

61 people in hospital as summer ends with election

Attorney General defends Kelowna Mountie involved in rough arrest

Tyler Russell filed a lawsuit against Const. Siggy Pietrzak in June of this year

‘Unprecedented’ coalition demands end to B.C. salmon farms

First Nations, commercial fishermen among group calling for action on Cohen recommendations

Earthquake off coast of Washington recorded at 4.1 magnitude

The quake was recorded at a depth of 10 kilometres

‘Perfect storm’ causes influx of black widows in the Okanagan

The region’s only venomous spider has come out in full force this year

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

B.C.’s top doctor says she’s received abuse, death threats during COVID-19 response

Henry has become a national figure during her time leading B.C.’s response to the COVID-19 pandemic

Suspected human remains found in burned out vehicle on OKIB land

Vernon North Okanagan RCMP hand over investigation to Major Crimes

Kamloops RCMP search for armed robber of pizza restaurant

The incident unfolded on Monday evening at the Sahali Domino’s store

Most Read