Canada’s major forestry companies are riding an industry upswing as their share prices soar despite trade disputes with the United States and delays in shipments.

For investors big and small, the stock rally since early 2017 has been a welcome sight in a sector that has gone through a series of economic downturns.

“It’s a cyclical industry, and cycles come and go,” business magnate Jim Pattison, who has invested heavily in B.C. forestry companies, said in a recent interview with the Globe & Mail. “The key is to take advantage of the cycles when the time comes.”

According to the report in the Globe & Mail, analysts say forestry firms have invested heavily in new technology to become more efficient at sawmills, including the use of sensors and lasers to make the most of each log.

Pattison points to the evidence on the shop floor. “You go through a mill, and it’s a lot different [than] when you used to go through. New technology has moved in,” said the 89-year-old billionaire.

The difference this time in the commodity cycle is that lumber, in particular, might be in the early stages of an extended rally. Raymond James Ltd. analyst Daryl Swetlishoff said lumber producers are poised to enjoy what he calls a “supercycle” − a multiyear boom in which producers enjoy both high softwood prices and strong output at their mills.

Mr. Pattison, who owns nearly half of Canfor Corp. and more than 10 percent of West Fraser Timber Co. Ltd., said he’s pleased to see the forestry sector find its footing. Since the beginning of 2017, the share prices of both companies have nearly doubled.

Canfor closed at $29.96 on Friday on the Toronto Stock Exchange while West Fraser finished at $89.75 – both near their record highs. Mr. Pattison’s Canfor stake is now valued at $1.9-billion and his interest in West Fraser is worth more than $700-million.

Mr. Swetlishoff originally floated the notion of “peak lumber” back in 2010, and while it has taken longer than envisaged for a sustained upswing to emerge, he sees signs of a combination of robust demand, tight supply, and strong prices. “More recently, lumber prices have hit all-time highs as elements of the supercycle thesis have come to pass,” he said in a research note.

On the demand side, fears of reduced lumber orders from the U.S. due to the cross-border softwood dispute have proven to be overblown. In 2017, the U.S. Department of Commerce imposed final countervailing and anti-dumping tariffs averaging 20.23 percent against most Canadian lumber producers.

See full report here.