Another week, another round in the softwood lumber dispute. Yesterday, the U.S. Coalition for Fair Lumber Imports filed court papers with a federal appeals court in Washington, D.C. that it says establishes how U.S. companies are being deprived of their due-process rights through non-U.S. panel decisions under NAFTA. No hearing date has been set. |
Meanwhile, Ottawa is asking for a review of the latest U.S. softwood lumber duty rates. After consulting with the Canadian lumber industry, the Department of International Trade will challenge the rates set by the U.S. DOC. The dispute is a hot issue in the upcoming January 23 Canadian federal election.
According to the NAR’s chief economist, the 2006 U.S. housing market should hold steady, with a return to more normal rates of price growth. Home demand has been largely met over the past five years, and small mortgage-rate increases are causing some market cooling. A 30-year fixed-rate mortgage is likely to rise gradually to 6.7% by mid-2006.
B.C.’s Lower Similkameen Indian Band has signed a $1.1-million, five-year forestry agreement with the province. The Band receives access to 67,500 cubic metres, with a further potential annual allowable cut in the Okanagan Timber Supply Area of 53,490 cubic metres, depending on pine beetle outcomes.
Effective April 19, 2006, Tolko Industries will close its The Pas, Manitoba sawmill if an agreeable financial solution is not arrived at by January 20. A closure would affect 227 employees and remove 185,000 bf of lumber from the market. This year, Minnesota’s Lyman Lumber will invest $15–$20 million in a Longview, WA industrial park employing up to 480 people and earning $100 million in yearly revenue through a new truss company.
There is vulnerability in Canada’s SPF market (especially W-SPF) that started late last week and carried into early trading this week. Futures dropped limit-down on Friday, causing concern. Other species, such as Douglas fir, Inland KD fir and SYP, appear steady to firm. Last week, wholesalers focused on cleaning up their short positions. This market has the potential to turn around, but for the next week look for prices to soften by about $5.