Lum­ber prices rise with B.C. wild­fires

The Hamilton Spectator - - BUSINESS - ALEK­SAN­DRA SA­GAN

VAN­COU­VER — 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 Fri­day, the bench­mark price of Western spruce-pine-fir lum­ber rose 7.12 per cent to US$406 per thou­sand board feet from US$379 last Fri­day, ac­cord­ing to fig­ures from Ran­dom Lengths, which tracks lum­ber and panel prices.

It’s a “ma­jor 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.

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.

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