Lumber markets can be scary. So Halloween presents nothing unusual for lumber traders around here. We’re pretty much conditioned against fright. But on this day, as the little goblins get set for fun, some guys tell us they’re ready to join into the “spirits” of things. Eat drink and be scary. But that’s not really where it’s at. In fact we’ve long ago laid to rest the ghosts of lumber markets past.
Now it’s true that some traders have been known to masquerade as market experts year ‘round, so why should Halloween be any different? It’s been said there is nothing that gives more assurance than a mask. But on this evening, we look forward to joining our little ones in fun – maybe tuck a candy bar into the pocket – and carve a thousand smiles into that pumpkin.
“If you are building anything with lumber on planet earth, things got 10% more expensive this month. This seems unsurprising to us as the former brakes that were jammed on the housing market prior to the mid-September Federal Reserve meeting have been swapped out for a gas pedal with a brick strapped to it for good measure.” Full Story here at EconoMonitor.com.
Image Source: EconoMonitor.com
The news reportedly came as a shock to the town of Houston, whose population is just over 3,000. “There was no warning at all,” said Houston Mayor Bill Holmberg. “Everybody’s aware of the pine beetle and reduction in timber that was going to come because of that. But I don’t think anyone expected it quite this fast, even though we knew sooner or later mills were going to have to close because there just isn’t the volume of wood.” The full story from Global News BC is just one of a flurry of reports popping up online this evening concerning the sudden announcement that two sawmills among ‘the majors’ – West Fraser in Houston and Canfor in Quesnel – will close. The impact of the closures in these rural communities will be felt most of all by 434 employees and their families. “Rural economies are rapidly changing” we’re told.
Short term timber supply constraints in the Interior are clearly intensifying. Salvage logging of MPB wood is in decline. In the years following the 2008 U.S. subprime mortgage crisis, large volumes of surplus production sold offshore provided underlying support for domestic prices. It seems evident this September and October however, that stronger demand for lumber across North America, bolstered by a resurgent U.S. housing market, is the leading factor behind unseasonably high prices.
Lookin’ good! NAWLA Traders Market, Las Vegas 10-24
“Sainas in Vegas” 10-25
As lumber traders across North America land in Las Vegas this afternoon for the 2013 NAWLA Traders Market, there’s plenty of industry news to peruse. For starters, while the majority of B.C. lumber exported to China continues to be low-grade, The Vancouver Sun confirms here today that there has been a 12% year-over-year increase in higher grade shipments for wood-frame construction. “Efforts by B.C. to introduce wood-frame construction – including the use of roof-building systems and infill and exterior walls in apartment construction – are beginning to gain wider acceptance.”
In the same paper, another report here reveals that China’s interior is an untapped market for B.C. lumber. “In the interior you have what the Chinese refer to as small cities of 10 million people where there is virtually no Canadian lumber yet,” explains Wayne Guthrie, Senior VP of Sales at Canfor. “We view that as a huge opportunity over the next five years.” Forbes tells us that the Chinese government is pouring money into interior infrastructure, which bodes well for B.C. “Yes, there is Russian lumber, but it is coming a long way to get to central China,” adds Guthrie.
Speaking of Russia, an explosive report here at NPR leads us to an undercover investigation some might find worthy of 3-D glasses in an IMAX Theatre one day (see video below). With long term projections of scarcity for wood fibre in mind, the growing frequency of these disturbing stories surrounding exploitation of the world forest is apparent.
Much has been written about “peak lumber” (try typing super cycle in the search bar at top right corner of this blog).
But have you heard about “peak foliage”? It’s reportedly big business this time of year, attracting tourists from around the world to prime color regions like New England, Michigan, and Wisconsin. Fall foliage hotlines and extensive reports from the U.S. Forest Service even help improve the odds for serious leaf peepers in the crap shoot known as prognosticating peak foliage (it’s said that “one person’s peak is another person’s near miss”). The U.S. Forest Service tells us here that three factors influence the timing of autumn leaf color: leaf pigments, length of night, and weather.
NBC News recently listed the 11 best places to see fall colors: Vermont, New York, Canada :-), Colorado, West Virginia, Tennessee, Missouri, Wisconsin, Texas, Oregon, and California. While most all of my customer trips to the Northeast U.S. have been in summer and winter, I was fortunate to catch the earliest pockets of brilliant colors one September, on a long rolling drive through Upstate New York. What a glorious sight.
North of the border, Eastern Canada rightfully “gets all the credit when it comes to exploring the fall colors”. Still, this site offers eight places to enjoy autumn’s beauty in and around the Lower Mainland.
Early last evening, I captured the images below at the end of my foggy street in downtown Vancouver. Has your neighborhood reached peak foliage? Wherever you live, I invite you to send me your colorful autumn photos for sharing. Update: Images added at bottom from the Lake George Region, Adirondack Mountains, NY (with thanks to J. Miller). Update: image at bottom of post added – UBC 10-23-13 (Photo Credit: A. Harder)
Foot of Marinaside
Softwood lumber exports from B.C. to China this year are on pace to surpass the high water mark established in 2011 (CA$1.1 billion or US $1.07 billion). WantChinaTimes.com reports here that B.C. softwood lumber exports to China through Q3 were CA$760 million (US$735.8 million), a 27% increase over the same period last year. Perhaps more surprisingly, it’s reported that B.C. holds a 53% share of the entire softwood lumber market in China. That impressive stat confirmed by Steve Thomson, B.C. minister of Forests, who was interviewed at the airport Wednesday prior to embarking on the latest provincial trade mission to China and Japan. Added Thomson: “We’re not going to see the continued exponential growth that we’ve had in building the market, but we feel there’s great opportunity particularly in mid-rise, residential construction to build value for the industry. I think the market is going to continue to grow. China is still on a very significant urbanization, so we’re going to continue to see growth in the market there.”
- “Why is futures up limit?” With reports of at least one wholesaler filling his shorts yesterday, that was the question, after traders awoke to their screens locked green. Sleepy cash markets caught fire. “In this low Open Interest, illiquid environment, you can sneeze and it’s up and away,” explained Jamie Greenough, Commodity Futures Representative at Global Securities Corp. “Someone looking to sell 100 contracts might just as quickly take things down limit.”
- “Our business model is simple. Find a way to give our customers what they need, when they need it, at a competitive price.” Check out the whole President’s Message – and more – at the flashy new Dakeryn site here.
“River Logs” – Fraser River, B.C. Photo Credit: ejharder