As Labor Day approaches, conflicting reports continue to dominate lumber markets. Today, traders are eyeing with interest Canadian lumber production numbers for June – up almost 11% compared to June 2014:
Lumber production by sawmills increased 5.5% from May to 5 618.5 thousand cubic metres in June. Compared with June 2014, lumber production rose 10.9%.
Sawmills shipped 5 804.7 thousand cubic metres of lumber in June, up 6.3% from May. Compared with June 2014, shipments rose 6.4%.
– Statistics Canada here
This chart would seem to be symptomatic of so much of what’s happening these days. Since peaking in early July, the Random Lengths Framing Lumber Composite Price has fallen $40.
In this dangerous wildfire season I might have suggested it’s not a time to be lighting matches – even for candles that signal turning 50!
With a salute to the B.C. Wholesale Lumber Association’s Annual Golf Tournament also happening today, this archived photo is merely a reminder that age might be the best fire extinguisher against flaming youth. Speaking of which, in this business, most lumber traders have long ago figured out that age doesn’t necessarily make inventory worth more. Though it might expose market forecasts to be worth less.
Seems even as far back as 1977, I was caught sitting on Carrier inventory!
With my brother Matt – Carrier Lumber, Prince George
We can now add “back-to-school distractions” to the long list of conflicting forces presently shaping lumber markets. According to the Random Lengths Midweek Market Report, “Hot weather, back-to school distractions, and vacations contributed to the lethargic pace” in recent days. Traders likely consider China, multi-family trends in ‘house construction’, abundant global fibre supply, and a weak Canadian dollar to be more impactful factors at the moment.
Even the October 12th expiry of the Softwood Lumber Agreement (SLA) is now in sight. In midst of one of the worst wildfire seasons on record, the Framing Lumber Composite Price has actually drifted lower since peaking in early July. Before the SLA expires, it’s possible that a significantly higher export charge could be triggered for just the first eleven days of October. How might that play out?
Meanwhile, we’re told here “for softwood lumber prices to rise meaningfully, Canada’s lumber industry will have to reduce its current overproduction.” It’s interesting to note that ‘overproduction’ has been one among many characterizations said to have been impacting cyclical lumber pricing patterns over the past 20 years. In today’s post-beetle world, the rationale for perceived “overproduction” strategies among the province’s largest producers is complex, if not confusing to many.
While fly fishing at Stoney Lake Lodge (27 July 2015) photo credit: ejh
The Canadian Maritime provinces of New Brunswick, Nova Scotia, and Prince Edward Island extended their full sunny summertime warm hospitality when our family visited there last week. My in-laws would join us in a memorable minivan adventure from Saint John, NB to Parrsboro, NS (“Home of the World’s Highest Tides”), before crossing the eight mile Confederation Bridge for three terrific, lobster-packed days in picturesque PEI. The handful of images below include magnificent Cavendish Beach at sundown.. and the “Birthplace of Confederation” – Charlottetown, PEI.
We’re here! Saint John
Sunset swim at Cavendish Beach