Interesting article in today’s Barron’s (“News before the market knows”) about dropping lumber prices:
This is before and independently from Katrina’s effect. Overproduction due to various factors including 1) strong demand for paper and chips products, turning solid lumber into a by-product of pulp production, 2) improved cutting (laser technology) resulting in better yields from logs, 3) overharvesting to combat the Japanese beetle in British Columbia…
Haven’t bought lumber in a while myself, was wondering if some folks have noticed lower prices at their lumberyard.
Replies
That website requires a login and password.
I tried bugmenot.com, but still couldn't get in.
I didn't read the Barron's article because of the log-in/password jazz, but there was talk here a couple of days ago of the Canadian gov't trying to get the US import duties on softwood lumber dropped or suspended to help cut prices for the reconstruction to come in New Orleans.
Then this morning they announced they wouldn't 'use' this situation to 'pressure' the US gov't, because it might be 'misinterpreted'.
Oh, my achin' head....
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.
Dinosaur, I live in Canada and did hear something last week about that. What bit I do know about it is that the U.S. government has, for quite some time, imposed very high "tariffs" on Canadian lumber coming into the U.S.. It is making the lumber companies up here get hit hard in the pocket so to speak trying to sell their lumber over the border. Now the Canadian Government is claiming the U.S. has "illegally" charged some kind of cost on Canadian lumber. I never listened to my newscast that closely so I can't give the full story. I do know that Canadian lumber companies are willing to help in any way with repair work in the Southern U.S..
For years now whenever there has been damage as a result of a hurricane(s) in the U.S., Canadian lumber companies have exported a lot more of their lumber down there, thus driving up the prices we pay for the same stuff.
Canada is willing to help guys, whatever it takes.
Take care everyone
Paul
The basic dispute is over what constitutes 'subsidizing'. The US claims that because much Canadian softwood is cut on Crown land, Canadian lumber companies enjoy an unfair cost advantage over US companies and thus compensatory duties were imposed.
Interpreting the facts is somewhat complicated due to differences in policies among the provinces, and between the US and Canadian tax systems. There's a lot of grey and not very much black and white. But the US lumber lobby has convinced the govt. down there to stonewall.
Canada took this to the World Trade Commission quite a few years ago and won. The US ignored that decision and continues to do so. To the detriment of both Canadian producers and US consumers. Only US producers profit from this.
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.
God there's so much politics and red tape to things nowadays Dinosaur. I can see it causing a lot more problems for people affected by Katrina. For example, how long will people have to wait before they can have "a home of their own" after they've lost everything. Politics is a dirty word in my opinion.
Take care everyone from all of us in canada.
Paul
An 'honest' politician will tell you, in response to a complaint that he hasn't pulled up his own trousers and made a solid stand on an issue, that if he annoys too many people too severely by doing so (which he will, no matter what the stand might be; that's human nature), he'll be out and then won't be able to do what you want him to do.
So his solution is to waffle and prevaricate and sit on the fence and then--if he's got a conscience--try to slip the good stuff by when nobody's looking too hard.
Unfortunately, that kinda political wrangling takes time. And time is what the victims of a disaster don't have....
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.
Perfectly spoken words D..
Paul
Well sticks may be going up in price because of the increased demand.
As you can see by my handle I'm pro ICF... and I can't for the life of me
figure out why anyone in the Hurricane Zone would rebuild with sticks when
they all just got blown away?
Why not build something that you can leave to your kids, guys.
Concrete , Rebar and Foam. The 3 little pigs never had it so good.
Read in the business section of the paper a couple of days ago that plywood and OSB was up 17.7% following hurricane Katrina. Haven't been to the local lumberyard to check what it is locally here in Portland, OR. Need to get a few sheets but may want to wait a while and see if things settle back down again, although the rebuilding of the Gulf area may take quite a while.
I kind of remember in one of the early debates (I think against Gore), didn't it come out that President Bush owned a lumber company but he was unaware of it?
Being as far from Washington as I am, I have to rely on hearsay to get any idea of what's going on down there. But people closer to the action tell me that 'unaware' describes his normal state of mind pretty well....
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.
Sorry I missed the fact that this site required a login (paid subscription), it is setup and forgotten on my 'puter, easy to forget.
WRT to the tariff issue, quote
Also, in May 2002, the U.S. slapped a 27.2% countervailing and anti-dumping duty on Canadian lumber, to counter what it saw as government subsidies for certain Canadian mills. To maintain and grow market share in the U.S., Canadian companies lowered costs, says Bob Book, senior market analyst for TJ&R Trading.
Some companies went so far as to refit their mills with laser technology, a move that generated as much as 15% more lumber from a log. In addition, many mills went to 24-hour production to reduce per-unit costs even more. The combination "basically offset the duty," Book adds. ... end of quote
I live in the middle of the Mountain Pine Beetle devastation in British Columbia...has nothing to do with Japanese...not sure where they got that from?
Byron
I went back to check that it wasn't my mistake, given that these buggers have been on my bad side since I've had an infestation of them at my place. Article said:
" The recent increase in lumber production also reflects British Columbia's efforts to control the Japanese pine beetle. Cutting down infected trees, and even healthy ones near them, is the only way to control or eliminate this pernicious pest. Most of the lumber from such trees is usable, and provincial authorities sell it at a steep discount to attract buyers, Book says..."
Here's what's going on....then I'm probably going to be scarce around here because today is the start of the new year.....
The complaints that triggered the tarriffs and countervail don't come from 'the American lumber industry'. They come from a small portion of the lumber industry, members of the Coalition for Fair Imports (most of the industry are against them).....small but politically connected producers mostly in the South and Minnesota. These are companies that are for the most part not very productive....old technology etc. So they got the government to throw up tarriff barriers, and because of the Byrd amendment (which has been declared illegal under international law), they stand to divvy up the $5 billion dollars in tarrifffs already collected.
The American position revolves around how prices are determined for lumber....the claim is that low stumpage rates from crown land amounts to a subsidy (although Eastern Canada has been lumped in on this lumber war, and most of our lumber comes off private land). Canada has challenged this through all levels of the WTO and NAFTA....US has won a couple of small points, but every significant finding including the most recent decisision by the top appeals committee of NAFTA has gone Canada's way; I think there is one more WTO decision to come. The tarriffs have already been recalculated down because they couldn't stand up in any of the trade dispute courts. But the US has announced it won't abide by the NAFTA decision, and they want Canada to pursue it in the American court system......and they aren't giving the tarriff money back. Canada has said no way.
Much of the American lumber industry, most of the American remanufacturing industry (trusses etc.), and the construction industry including the NAHB are totally against the tarriffs. NAHB's position is that the tarriffs are pricing American citizens out of the housing market. It's just this small group of producers in the coalition who aren't competitive that are driving this.
If anyone wants to debate that stuff, have at it, and the arguments are very complicated.....but in the meantime what has happened is that the Canadian industry has gotten super-productive......the older mills have closed, and the new mills are cutting edge. So good that they are profitable even with the tarriffs on American sales.....we did supposedly have a period here where there was a lot of cheap lumber available in Canada (I never noticed it, but I don't buy a lot of dimensional lumber)....and ironically, we lost market share to Scandinavia and Eastern Europe, where massive state subsidies really do exist, but they haven't had any barriers put up to importing into the US. But now the Canadian operations (and a lot of these operations now are part American, part Canadian), can get it into the States and make a profit even in spite of the tarriffs.
As far as lumber prices going down post-Katrina.....markets were reporting a lot of panic buying and speculation on lumber and panel products at the end of last week. Don't know who the big players are, but I think you'll see prices going up for the next while. I'm sure there are people speculating and hedging and trying to make a quick buck, but I think most of the mills are more focussed on getting the underlying dispute resolved, the tarriffs done away with, and the money returned so they can get out of the courts and sell lumber that the American consumer wants and needs.Cabinetmaker/college woodworking instructor. Cape Breton, Nova Scotia.