Composite Watch

The “Prevailing Monthly Price” has been above $355/M since November 27th, 2012. As a result, there has been no export charge on Canadian softwood lumber shipments to the United States for five consecutive months (January – May). The Prevailing Monthly Price is calculated by averaging the four weekly Framing Lumber Composite Prices available 21 days prior to the beginning of the month to which it is applied. While there will be no export charge through June, the four Composite Price dates for the July calculation begin this Friday (5/17, 5/24, 5/31, 6/7). Since peaking March 29th at $451, the Composite Price has fallen $68 to $383 as reported May 10th. It’s widely anticipated this price will be lower again at Midweek tomorrow. While projections suggest supply growth will struggle to keep pace with demand growth over the next 18 months, traders are closely monitoring the day-to-day changing landscape.

Prevailing Monthly Price/Export Charge

Prevailing monthly price
per thousand board feet
Option A – Export
Charge (%)
Option B – Export Charge
plus Volume Restraint
Over US $355 0 0
US $336-355 5 2.5% + regional share of 34%
of U.S. Consumption
US $316-335 10 3% + regional share of 32%
of U.S. Consumption
US $315 or under 15 5% + regional share of 30%
of U.S. Consumption

B.C. Coast, B.C. Interior and Alberta initially chose Option A while Saskatchewan, Manitoba, Ontario and Quebec chose Option B. To date, all regions have retained their original options. (Source)

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