Softwood lumber is pictured at Tolko Industries in Heffley Creek, B.C., on April, 1, 2018. THE CANADIAN PRESS/Jonathan Hayward

Lumber company shares rise on news U.S. intends to cut softwood duties

CIBC analyst suggests average U.S. duties to drop from US$67 per thousand board feet to US$30

Shares in Canadian lumber companies rose Tuesday on news that the U.S. government could reduce duties on softwood lumber imports in August.

In early trading in Toronto on Tuesday, Canfor Corp. stock rose as much as 7.5 per cent, West Fraser Timber Co. Ltd. jumped by 6.2 per cent and Resolute Forest Products Inc. was up three per cent.

The shares closed at lower levels, with Canfor up 4.3 per cent, West Fraser up 2.1 per cent and Resolute down 5.2 per cent.

In a report on Monday, CIBC analyst Hamir Patel suggested average U.S. duties would drop from about US$67 per thousand board feet to about US$30 based on current pricing levels of about US$400.

“According to trade contacts, preliminary revised duty determinations from the U.S. government have been communicated to the Canadian industry,” Patel said.

“We expect Canadian lumber equities to respond positively to this news as these rate revisions were better than most Canadian industry participants were expecting.”

West Fraser’s rate may fall from 23.6 to 9.1 per cent, Canfor’s from 20.5 to 4.6 per cent and Resolute’s from 17.9 to 15.8 per cent, he said.

The report says the “all others” duty rate could fall to eight per cent from 20.2 per cent, but added it’s not expected that Canadian companies will receive any refund or credit for overpayment until the trade dispute is resolved, something not expected for two to three years.

A U.S. Commerce department spokesman confirmed on Tuesday that preliminary results of an administration review were issued on Monday but said the impact on softwood lumber deposit rates are not yet determined.

READ MORE: Canfor shareholders reject Pattison’s takeover offer

The U.S. imposed duties on most Canadian softwood exports in April 2017, alleging that Canada was unfairly subsidizing its industry and dumping wood into the U.S. at unfair prices.

This is the fifth time Canada and the U.S. have fought over the same issues.

In September, a joint Canada-U.S. trade panel gave the United States 90 days to rethink its tariffs, finding there was no evidence Canadian imports were causing injury to the U.S. industry.

The Canadian Press

Like us on Facebook and follow us on Twitter

softwood lumber

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

‘Corona Busters’: Vernon man drives vintage ambulance in appreciation of health-care workers

Rob Newport says he aims to make people smile during the COVID-19 pandemic with Ghostbusters-themed ride

Interior Health officials outline pandemic response in virtual town hall

Kelowna-Lake County MLA Norm Letnick moderates digital discussion, Q&A with Interior Health leadership

Cookie monsters rejoice as B.C. stores sell Girl Guide sweets

With door-to-door sales cancelled, a few big chains have stepped up to distribute

Kids get back to learning in B.C., online

Ministry of Education rolls out new tool for school

Second Vernon-area high school exposed to COVID-19

Kalamalka Secondary School staff, students urged to self-isolate if showing symptoms

Trudeau announces 75% wage subsidy for small businesses amid COVID-19

This is up from the previously announced 10 per cent wage subsidy

Morning world update: Cases surge past 600,000; positive news in Germany

Spain suffers its deadliest day as Germany considers April 20 to possibly loosen restrictions

VIDEO: Penguins roam empty halls of Vancouver Aquarium

COVID-19 has forced the Vancouver Aquarium to close access to guests – leaving room for its residents

67 more B.C. COVID-19 cases, two more deaths in Vancouver region

Positive tests found in Surrey, Langley long-term care facilities

‘Now is not the time to bag that peak’: BCSAR manager discourages risky outdoor adventures

Call volumes are not going down, even as the COVID-19 pandemic persists

Food Banks BC already seeing surge in demand due to COVID-19 pandemic

Executive director Laura Lansink said they expect applications will keep increasing

Nanaimo couple caught aboard cruise ship with four dead and COVID-19 present

Four ‘older guests’ have died on Holland America’s Zaandam; cruise line confirms two COVID-19 cases

Regional District of Okanagan Similkameen cancels April 2 meeting

Staff working to install videoconferencing system during COVID-19 pandemic

Frontline workers receiving COVID-19 isolation exemptions prompt concerns

Provincial Health Authority staff exempt from self-isolation upon return from international travel

Most Read