Canadian softwood lumber prices have fallen substantially in the past nine months, but that long, steady decline should end soon, according to industry analyst Hakan Ekstrom.
The president of Seattle-based Wood Resources International said early signs of a resurgent U.S. housing market should boost the demand for Canadian wood.
“We probably reached the bottom on prices two weeks ago and can expect them to start moving up now,” he said.
Ekstrom noted approved U.S. building permits last month increased by nearly 12 per cent to an annual rate of 1.28 million housing units, the highest level since August 2007.
“That’s a clear sign that we should see more U.S. house construction soon,” he said. “People have been a little bit too careful about spending money for a new home, but that looks like it’s about to change.”
Industry publication Random Lengths said its weekly framing lumber composite price rose $10 US last week to $332 US for 1,000 board feet, compared with $371 US a year ago.
Ekstrom said the low Canadian dollar helps Canadian lumber exporters, but noted that producers must pay export duties ranging from five to 15 per cent when lumber prices fall below $355 US.
His Wood Resource Quarterly report notes Canadian lumber exports rose 14 per cent during the first quarter this year — including a 21-per-cent increase to Japan, a 13-per-cent increase to the U.S., and a 10-per-cent spike in exports to China.
“If you’re a sawmill in B.C., I think you could be optimistic when you look ahead this year,” Ekstrom said. “Prices in the U.S. are likely to go up, and China and Japan might be a little more interested in Canadian lumber, depending on exchange rates and freight costs.”
Council of Forest Industries representative Cam McAlpine attributed recent depressed lumber-price trends to a “glut of inventory.”
“We had somewhat stagnant demand in the United States, and growth in China has not been as robust as it was in the past,” he said.
Hydro VP to take over Council of Forest Industries
BC Hydro executive vice-president Susan Yurkovich will become the new president and chief executive officer of the Council of Forest Industries on Sept. 14, COFI announced Tuesday.
Yurkovich, who leaves Hydro at the end of this week, will replace James Gorman, who is taking a new position as vice-president of Vancouver-based wood products company West Fraser.
Gorman joined COFI in September 2013 after previously serving as the B.C.’s deputy minister of advanced education.
Yurkovich was responsible for leading the development of Hydro’s $9-billion Site C dam project on the Peace River. Prior to joining Hydro, she spent 10 years at Canfor, where she was vice-president of corporate affairs.
The University of B.C. Masters of Business Administration graduate also spent several years in Ottawa working as an adviser to the federal ministers of Indian Affairs and National Defence.
Yurkovich, who will also serve as president of the BC Lumber Trade Council, will head COFI at a crucial time, as the nine-year-old softwood lumber agreement between Canada and the U.S. is set to expire in October.
Nick Arkle, who chairs COFI’s management committee, said Yurkovich has the qualities to hit the ground running when she assumes her new role in September.
“She has lots of confidence, lots of connections and that broad experience she can bring together and apply very quickly,” he said.