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

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

Just Posted

Dining moose a welcome distraction at Salmon Arm campus

Pair feast on willows, unperturbed by onlookers at Okanagan College

Woman convicted in Salmon Arm love triangle murder granted escorted temporary absences

Monica Sikorski was 17 when she plotted shooting death of 22-year-old Tyler Myers

Shuswap’s water rescue crew preparing for frigid temperatures

New training follows Dec. 9 mission to help a man suffering health problems at remote cabin

Shuswap outdoor skating rinks open to public

Rinks in Celista and Silver Creek ready for outdoor fun

Slight drop in annual Salmon Arm bird count, seed sales spike

Shuswap Naturalist Club bird spotters excited to see several owls

Older Canadians highlighted in Kelowna film project to fight ageism

The project is part of a campaign to combat ageism

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

Good Samaritan pays part of rent for B.C. woman facing eviction in can-collecting dispute

Zora Hlevnjak, 76, supplements her pension by collecting cans and receiving public donations

Princeton – a Prince Town in waiting?

The Town of Princeton has been waiting 160 years for a Royal… Continue reading

Group builds shelters for Vernon’s stray cats

Twenty insulated cat shelters were constructed by volunteers and delivered around town

UBCO partners with Boeing to test new anti-ice coating technology

The coating could one day be applied to all airplanes to prevent ice buildup

Revelstoke already double last year’s snowfall

The city is just below halfway to the snowiest winter on record

True Stories: Okanagan memoir-writers, reading

Reading with local North Okanagan writers Art Dalton, Patti Shales Lefkos, Raven Dahl, Janelle Hardy

Kelowna’s last video store, Leo’s Videos, to remain open despite failed sale

Kelowna’s last video rental store will remain open and under its namesake’s ownership

Most Read