Softwood lumber is pictured at Tolko Industries in Heffley Creek, B.C., on April, 1, 2018. THE CANADIAN PRESS/Jonathan Hayward

Lumber company shares rise on news U.S. intends to cut softwood duties

CIBC analyst suggests average U.S. duties to drop from US$67 per thousand board feet to US$30

Shares in Canadian lumber companies rose Tuesday on news that the U.S. government could reduce duties on softwood lumber imports in August.

In early trading in Toronto on Tuesday, Canfor Corp. stock rose as much as 7.5 per cent, West Fraser Timber Co. Ltd. jumped by 6.2 per cent and Resolute Forest Products Inc. was up three per cent.

The shares closed at lower levels, with Canfor up 4.3 per cent, West Fraser up 2.1 per cent and Resolute down 5.2 per cent.

In a report on Monday, CIBC analyst Hamir Patel suggested average U.S. duties would drop from about US$67 per thousand board feet to about US$30 based on current pricing levels of about US$400.

“According to trade contacts, preliminary revised duty determinations from the U.S. government have been communicated to the Canadian industry,” Patel said.

“We expect Canadian lumber equities to respond positively to this news as these rate revisions were better than most Canadian industry participants were expecting.”

West Fraser’s rate may fall from 23.6 to 9.1 per cent, Canfor’s from 20.5 to 4.6 per cent and Resolute’s from 17.9 to 15.8 per cent, he said.

The report says the “all others” duty rate could fall to eight per cent from 20.2 per cent, but added it’s not expected that Canadian companies will receive any refund or credit for overpayment until the trade dispute is resolved, something not expected for two to three years.

A U.S. Commerce department spokesman confirmed on Tuesday that preliminary results of an administration review were issued on Monday but said the impact on softwood lumber deposit rates are not yet determined.

READ MORE: Canfor shareholders reject Pattison’s takeover offer

The U.S. imposed duties on most Canadian softwood exports in April 2017, alleging that Canada was unfairly subsidizing its industry and dumping wood into the U.S. at unfair prices.

This is the fifth time Canada and the U.S. have fought over the same issues.

In September, a joint Canada-U.S. trade panel gave the United States 90 days to rethink its tariffs, finding there was no evidence Canadian imports were causing injury to the U.S. industry.

The Canadian Press

Like us on Facebook and follow us on Twitter

softwood lumber

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

Just Posted

Former Shuswap resident’s book describes how child’s death transforms mother’s life

Destanne Norris to hold book signings in Vernon and Salmon Arm

Fundraiser launched after Shuswap man dies while elk hunting

Davies’ friends say he will be remembered as ‘a fierce outdoorsman, amazing and loyal friend’

Wanted Alberta man linked to Shuswap stabbing turns himself in

Terrance Alan Jones is charged with attempted murder and other offences in relation to an Aug. 16 incident in Blind Bay

Orange Shirt Society launches first textbook on residential school history

Phyllis Webstad and Joan Sorley worked on the 156-page book to help educate students

Column: Deep tax cuts come with a cost

In Plain View by Lachlan Labere

Kelowna RCMP looking for man in relation to assault investigation

The police are not releasing further details of the investigation

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Intersection disruptions for North Okanagan

All city-owned lights to be tested over next three weeks starting Monday, Oct. 5

New trial ordered for man found guilty of the 2010 murder of his wife in Arrow Lakes

Peter Beckett was found guilty murdering his wife 10 years ago

Metis pilot Teara Fraser profiled in new DC Comics graphic novel of women heroes

The Canadian pilot’s entry is titled: ‘Teara Fraser: Helping Others Soar’

Burnaby RCMP search for suspects after man racially abused, has coffee thrown on him

Police treating the incident as a hate crime and assault

Charges recommended for Mountie investigated in Kelowna shooting

Police watchdog recommends charges after shooting puts man in hospital

Most Read