WASHINGTON – Lumber prices that have soared amid a Canada-U.S. trade dispute could rise even higher after a fire at a British Columbia sawmill cuts supplies.
Futures are trading at a 23-year high amid rising demand for housing and after the U.S. imposed tariffs on softwood imports from Canada.
The rally could extend after a major fire at Tolko Industries’ Lakeview mill, which accounts for about 2 percent of production in British Columbia’s interior, CIBC analyst Hamir Patel said Monday in a news release.
Canada is the world’s largest softwood lumber exporter and the U.S. is its biggest market.
Lumber futures have gained as much as 40 percent this year to $459.60 per 1,000 board feet, the second-best performing commodity, according to data tracked by Bloomberg. Some Canadian sawmills are raising prices above $500 in an effort to offset countervailing duties of 14.25 percent and anti-dumping duties of 6.58 percent, according to Kevin Mason, managing director of Vancouver-based ERA Forest Products Research.
They are “hoping to jack up prices at the Canadian mills to offset final duties,” Mason said in an email.