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Specialty Program Solutions - Canadian Softwood Lumber - Logs Piled

For Now, We Have Canadian Softwood Lumber Tariffs

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For Now, We Have Canadian Softwood Lumber Tariffs

Does Canada price its softwood lumber unfairly? For now, the United States is setting tariffs on imports for Canadian softwood lumber close to 27%. These tariffs could become permanent if the United States International Trade Commission makes a final determination this year (expected to be delivered by December 18) that the American Industry was harmed by the alleged subsidies and dumping. [1] The lumber industry has already been affected by natural disasters this year. It seems as if Canada might have been benefiting more than the United States before lumber trade talks were discussed.

Canada and the United States have been in negotiations for months in an effort to reach a mutually beneficial resolution. Unfortunately, both parties were not able to make it happen. The United States Lumber Coalition Co-chairman, Jason Brochu said, “We are pleased that the U.S. government is enforcing our trade laws so that the U.S. lumber industry can compete on a level playing field.”[2]

Not everyone seems to have the same opinion. Some feel that this new tariff may harm the lumber market, not help. With lumber prices increasing after the hurricanes, Canadian Lumber will no longer be as affordable of an option as it was before. The Canadian Minister of Natural Resources and Minister of Foreign Affairs, Chrystia Freeland, stated they “will forcefully defend Canada’s softwood lumber industry, including through litigation, and we expect to prevail as we have in the past.”[3]

SPS Team

Specialty Program Solutions specializes in this niche market and are known to be industry leaders within the Inland Marine industry. You can always count on Specialty Program Solutions (SPS) to execute on excellence with unmatched speed, precision, and skill. If you’re looking to expand your book of business and work with a specialist in the Inland Marine industry, then contact us today!

[1] http://news.morningstar.com/all/dow-jones/us-markets/2017110211884/us-sets-final-tariffs-for-canadian-softwood-lumber.aspx

[2] https://www.enr.com/articles/43352-us-sets-stiff-tariffs-on-canadian-lumber-imports

[3] http://thehill.com/policy/finance/358545-us-slaps-duties-on-canadian-softwood-lumber

Specialty Program Solutions (SPS) - How are Hurricanes Affecting Lumber Prices - Hurricane Destruction Image

How are Hurricanes Affecting Lumber Prices?

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How are Hurricanes Affecting the Logging Industry?

Harvey, Nate and Irma are names that have brought a different meaning to habitants of the western hemisphere. These hurricanes have caused destruction comparable to Hurricane Katrina which hit the United States in 2005. These natural disasters have also affected the lumber/logging industry. Lumber prices have increased since these storms have touched the United States, but for just how long should we expect this increase to last?

Hurricane Harvey was the second costliest hurricane in United States history. Houston, East Texas, and Louisiana were heavily affected as oil refineries and chemical plants were shut down, roads and ports were damaged alongside widespread damage to homes, businesses, and cars alike.

A comparison of the stumpage price a month following the damage from Hurricane Harvey, Rita, and Katrina was created by Forest2Markets. A month after Hurricanes Rita and Katrina hit, stumpage prices dropped an extra 16% on an already down year (40% in total at that time). “Most of the stumpage price decline for both products was due to the influx of salvage timber sold in the market. Salvage timber is the removal of trees from forested areas that have been damaged by events like flood, wildfire, severe wind, disease, insect infestation or other natural disturbances.”[1]

The following year after the hurricanes hit, the price normalized and then slightly increased over the prior year. We are likely to see similar results following Hurricane Harvey. Salvage timber will be harvested much more now and we should expect saw timber and pine pulpwood prices to fall.

Prior to the impact of Hurricane Harvey or Irma, the demand for lumber was high with the resurgence of the housing market, log and veneer shortages out West and in British Columbia.[2] Consumers then began purchasing lumber to board their homes as they heard the hurricane was to make landfall, which in turn led another price increase. The price will remain around this level for some time as lumber will be needed to rebuild and restore damage from the impact of both hurricanes. Logging is in high demand now as Florida, Texas, and Louisiana are still recovering from the aftermath of both these storms. Though gas prices are beginning to level out, it looks like lumber prices will take some more time.

Specialty Program Solutions (SPS) Team

You can always count on Specialty Program Solutions (SPS) to execute on excellence with unmatched speed, precision, and skill. If you’re looking to expand your book of business and work with a specialist in the Inland Marine industry, then contact us today!

 

[1] https://blog.forest2market.com/how-have-recent-gulf-coast-hurricanes-affected-stumpage-price

[2] http://www.marketwatch.com/story/how-lumber-prices-could-score-a-big-lift-from-hurricane-harvey-2017-09-18