OTTAWA: The expiration of a long-standing trade agreement between the United States and Canada, combined with other factors, is causing volatility in lumber prices as the spring construction season is getting underway. “We’ve certainly seen a run up in prices here this spring,” said Rory Patterson, director of purchashing for Curtis Lumber, a regional lumber and building supplies chain. Canadian lumber mills, which primarily supply lumber companies in the local region, are raising prices in anticipation that the U.S. International Trade Commission will impose a 30 percent duty and penalty, retroactive 90 days, on lumber being imported from Canada to the United States, because of unfair trade practices since the U.S.-Canada softwood trade agreement expired about 18 months ago. “They know the date when the decision is going to be made,” Patterson said. “So then people started looking back 90 days, which was about a couple of weeks ago, and that’s when prices started to run.” The spike does not necessarily translate to an immediate retail price hike because prices could still fluctuate from day to day based on rumors and leaks about what action the commission will actually take, he said. “Depending on how other dealers step in and buy, that doesn’t mean our retail prices jump 30 percent right away,” he said.
The situation is complex, because debate between western and eastern provinces of Canada is sharp about how to proceed, said John Bartow, executive director of Empire State Forest Products Association. Before the agreement expired, lumber buyers in northeastern border states had favorable status with lumber mills in eastern Canada, he said. “It’s allowed those mills that are right on the border to kind of operate as if there wasn’t a border,” he said. The issue has an added impact on the local economy because many New York loggers supply logs to Canadian lumber mills. “So we’ve got a lot of landowners, a lot of loggers and a lot of haulers that benefit because they can bring that wood product to be processed and put on the marketplace,” he said. If western Canadian interests prevail and eastern Canadian mills close, New York loggers will lose the market. “We would just like to see it get settled,” Bartow said. The trade issue affects prices of spruce, used for framing, and cedar, used for decks, siding and decorative trim work, Patterson said. Cedar prices had already been high because of demand, he said. Weather also is a factor in the recent volatility. “Much of the country has had very good weather. It’s been a good building season, so that’s helped keep demand up. Obviously if demand is up, then mills can start raising their asking prices,” Patterson said. “So part of it is the build up for normal spring season and the other part is the Canadian agreement,” he said.
