LUMBER PRICES UP
The Vancouver Sun newspaper has reported that B.C. sawmills that have survived the deepest recession in memory are making money from 2x4s for the first time since 2007. The increased prices are good news for the battered industry, which saw lumber selling for US$317 per thousand board feet on Friday. That’s up from $165 per thousand last year.
John Allan, president of B.C.’s Council of Forest Industries (COFI) told the Sun, “There’s been a dramatic turnaround but its taken more than two years.”
Allan credits the rising prices to mill curtailments, many of them in B.C. The curtailments have tightened the supply of lumber into the United States, which is driving the price increases. However, lumber producers remain cautious, especially with a new round of home foreclosures on the horizon in the U.S. and continuing weak U.S. housing start numbers.
The increased prices for lumber means mills operating in B.C. right now are cash positive, according to Allan. Rick Jeffery, president of the Coast Forest Products Association told the Sun, “The price jump is strictly a supply-side response by the market.”
He credited production curtailments, low log inventory levels at mills and an increase in lumber shipments to China for the higher prices. Canadian exports to China showed a 135 per cent year over year increase for the first nine months of 2009 but according to Stats Canada B.C. lumber production has dropped 39 per cent since 2007 and more than 20,000 workers have lost their jobs. Many in the industry say the market in China is lessening the Canadian industry’s dependence on the U.S. market.
|
