To Everything a Season

To everything there is a season. A time to laugh a time to cry. Seasons of elections are not a time to negotiate trade agreements. So, it might be the time to cry as we read more reports of fading hopes for a Softwood Lumber Agreement (SLA 5) to be reached.

In their May 16th Industry Update, CIBC World Markets projects, “At some point (maybe late June/July), negotiations will simply cease due to the upcoming U.S. elections. Such a freeze is unlikely to be lifted until a new U.S. president takes office and even then, potentially only after a new U.S. trade representative is confirmed by Congress (maybe March/April 2017). With the window for reaching a deal closing, we expect the U.S. industry will petition for a trade case in five months when the standstill on litigation ends on October 12, 2016, after which Canadian producers could then get hit with 25%-30% preliminary duties as early as February/March 2017.”

In today’s Vancouver Sun, Vaughn Palmer reports Americans prefer a quota on Canadian softwood imports to the U.S., while Canadians prefer an export tax tied to lumber prices and exchange rates.

FEA analyst Henry Spelter has addressed exchange rates here: “This world we are living in – this nightmarish world where you have to focus on every nuance and accent on the part of central bankers and how they are going to control the exchange rate – is having a huge impact on business profitability. It obviously has disadvantaged the U.S. producers of lumber and greatly advantaged Canadian producers of lumber. This development is totally independent from everything else.”

So this season too shall pass; although unlikely before October.

“No matter who is the next president, the incoming administration will have to show it will be tougher on enforcement. And it will be completely disorganized and unfocused for months into 2017. The U.S. Lumber Coalition will have an unimpeded run down the field until the countervailing duties rates and AD margins are announced, and maybe thereafter. The pressure to negotiate and compromise is entirely on Canada. The Coalition benefits from any delays.” – Peter Clark, iPolitics.ca (15 May 2016)

2016 NAWLA Vancouver Regional Meeting

Record numbers jammed the elegant Vancouver Club’s Grand Ballroom yesterday afternoon, for the annual North American Wholesale Lumber Association (NAWLA) Regional Meeting. Billed as The Lumber Marketing Event of the Year, NAWLA’s Executive Director Marc Saracco opened the meeting at 3:50pm. Presentations by three featured speakers were all very well-received:

  • Cees de Jager, Chief Marketing Officer, Softwood Lumber Board
  • Daryl Swetlishoff, Senior Managing Director, Raymond James Ltd.
  • Susan Yurkovich, President and CEO, COFI

Before giving way to the ever-popular networking session, the meeting concluded with a presentation from Presenting Sponsor HSBC Bank Canada’s Ananth Krishnan, Head of Business Development, Global Trade & Receivables Finance. The Planning Committee also wishes to thank CP Rail, Euler Hermes, Norman G Jensen, and Blue Book Services for their generous support. Thanks also to Tree Frog News, for the following images posted with permission. See their full report here. More event images at Building-Products.com here.

 

Wood Basics

Earlier this month, Lauren Chimko, lumber trader at Dakeryn Industries, completed the NAWLA Spring Wood Basics Course at Mississippi State University (MSU), in Starkville, Mississippi. In the following guest post, Lauren shares a little bit about her trip and the four-day immersion course which included both classroom training and instructive tours of a number of field operations:

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Visting McShan Lumber Company – McShan, AL

Starkville, Mississippi – home to the MSU Bulldogs.. and not a heck of a lot more. The week of Feb 29th though, I joined over 30 newcomers to the wood products industry who flocked to Starkville to learn about – you guessed it – wood! The curriculum covered a variety of topics surrounding the life of a piece of lumber; from a wee little seedling in a forest to a structural component in a home. Key subjects: forest operations, sawmill production, transportation, and sales/negotiations. As one of those people who loves to learn, I was excited to be back in the classroom. Lectures started at 8am, and frequently included presentations from a number of expert guest speakers. Field trips were a highlight, not to mention the opportunities for networking.

The experts:
Dr. David Jones (MSU) talked everything forest, while Chris Knowles (Oregon State University) discussed the ins and outs of lumber manufacturing and global markets. Rubin Shmulsky (MSU) popped in to review engineered wood products, and took us to the lab to observe some tests. On day two, the class visited Alabama to tour two sawmills – an eye-opening first for many. On day three, resident Transportation & Logistics expert Phil Lower visited. Lectures concluded on the fourth and final day with Scott Olsen (The Olsen Group) on negotiation. Scott – I still want that book!

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The attendees:
Our diverse group arrived with backgrounds in sales, purchasing, law, engineering, logistics, and more. We had interns, employees with 20+ years in the wood products industry – and everyone inbetween.
With attendees from all corners of North America, our class had experience with all kinds of different wood species/products. The majority of the group was represented by the Southern States. There were three Canadians in our class, and I was pleased to see a decent representation of women (about 25%).

In a nutshell, Wood Basics is exactly that. A group of people coming together to develop a basic understanding of the products they deal with on a daily basis. If you want to take it up a notch, NAWLA also offers Wood Masters 2016 in Las Vegas (worlds away from Starkville, MS). Thank you to MSU for hosting us, the team at NAWLA (especially Jim, Chris, Erin and Matt), and all the presenters. Thanks also to all of the attendees, for a great week in Starkville.

Lauren will be attending the Montreal Wood Convention (March 21-23) and the COFI Convention in Kelowna (April 6-8).
View Paul Harder's LinkedIn profile View Lauren Chimko’s profile

Lost Art?

Being on the receiving end of a phone call these days can feel like an invasion of privacy, reports The Globe and Mail. But Mary Jane Copps (aka “The Phone Lady”) argues here that business still happens on the phone. In the present ’emoticon era’ however, “phone skills” involve fingers – not voices – meaning graduating students entering the workforce are not prepared for real live phone conversations with clients. According to Copps though, a lack of phone skills isn’t merely a generational failing. Many professionals in the workplace rely on e-mail, leaving their phone skills rusty.

Copps tells us it’s the caller’s responsibility to quickly diffuse the receiver’s defensiveness by avoiding opening lines such as “how are you doing today?” Back in the 90’s, as a green rookie nervously cold-calling forthright lumber buyers in Massachusetts, I certainly learned that rule in a hurry!

Today, email threads have replaced paper trails in Hilroy Notebooks confirming lumber tallies and other details of the order. But the phonecall remains a critical piece. Trading floor atmosphere is conducive to building energy and reading market moods, and interpreting those changes critical to decision-making. Perhaps the number of failed on-line lumber exchanges also reinforces the importance of the telephone. Anyone remember TALPX? Recall the biggest complaint among participating buyers and sellers was that “we always ended up having to pick up the phone anyway”.

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Searching for Lumber Man

Volatility that characterizes global financial market activity seems less pronounced in North American lumber markets these days. While winter weather contributes to a pause this week in especially Northeastern jobsite activity, there is evidence of general price support as reflected in mill order files. Despite unseasonably active markets, the Framing Lumber Composite Price has drifted sideways since the October 12th expiry of the SLA ($311 Oct 13 vs $313 today). A weak Canadian dollar has so far helped keep a lid on significant US price increases.  Dealer hand-to-mouth buying patterns and pressure on timely deliveries also suggest the memory of last year’s market collapse still lingers.

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In keeping with the preservation of old growth timber these days, now comes word Random Lengths is searching for the industry’s oldest active lumber trader. According to Random Lengths, candidates “must work full time in the U.S. or Canada, and spend at least half their time buying and/or selling lumber or panels”. It’s been suggested that at minimum, applicants should demonstrate a vague recollection of their last sale and/or purchase.

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NAWLA Vancouver – Speakers Confirmed

With the timeliness of SLA negotiations pending, we’re pleased to announce an all-star line-up of speakers is confirmed for this year’s nawlaNorth American Wholesale Lumber Association Regional Meeting at The Vancouver Club, April 21st:

  • Susan Yurkovich, President and CEO, Council of Forest Industries
  • Paul Quinn, Paper & Forest Products Analyst, RBC Capital Markets
  • Cees de Jager, Chief Marketing Officer, Softwood Lumber Board

NAWLA Executive Director Marc Saracco will open the region’s lumber marketing event of the year in the Grand Ballroom at 3:45pm. Cocktail Social to follow at 5:30 pm. Tickets are limited, available exclusively at the event website here.

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Billion Board Foot Club

How many new members will be added to the Billion Board Foot Club in 2015?  For the answer to Question Number 15, we turned yesterday to the analyst who coined the term to classify the largest softwood lumber producers on the planet. Russ Taylor, President of International Wood Markets Group Inc. told us yesterday: “It looks like there will be no companies added to the Club in 2015. The three closest companies (one each from Canada, USA and Europe) were all around 900 million FBM in 2014 and I am quite sure that none were able to increase output by 10 per cent. Back in 2005, there were 22 companies in the Club vs. 11 in 2014! Back in 2005, nine were between 1.0 and 1.2 billion, so when the market collapsed, most of these companies had production declines of 30-50%. So, it takes a long time to build back up production. A few have grown through acquisitions, but all of the 11 in 2014 were also in the Club in 2005.”

Nine members of the Billion Board Foot Club are on this continent: West Fraser, Canfor, Weyerhauser, Georgia Pacific, Resolute Forest Products, Interfor, Sierra Pacific Industries, Hampton Affiliates, and Tolko Industries.

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Source: timber-online.net

Lumber Traders Obsolete?

Time to answer Question Number 7 for 2015: Is information technology rendering lumber traders obsolete?
While it seems reasonable to surmise the pool of lumber traders is getting smaller (consolidations in North America, vanishing lumber agents in China), information technology is not rendering lumber traders obsolete. It would seem that there are intangibles traders bring to the marketing function in the lumber business that, and we might have to agree with Donald Trump here, will always be necessary to fashion an effective deal! In fact the challenge of interpreting change in prevailing market uncertainties is probably greater than ever. Change no doubt calls for ever-shifting adjustments and demands of accommodation which of itself might be said to enhance the opportunities that a good lumber trader offers in today’s lumber market environment.

~Dak the Halls~

First United Church doubles as Vancouver’s Downtown Eastside (DTES) homeless shelter. A recent visit in support of First United, one of several Dakeryn charities (including Downtown Eastside Neighbourhood House, North Shore Crisis Services Society) brought home the realities of daily challenges many on the margins of society face. I had the opportunity this past Sunday morning to listen to Reverend Sally McShane, the minister at First United. Her reflection on recurrent theme that “we are possibility” reinforced an awareness of our own privilege and “possibilities” to make a difference in the lives of the less fortunate.

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With Wendi Lawrence, Building Manager at First United Church Social Housing Society, and Chris Sainas, Dakeryn (Dec 10, 2015)

Fall Colors

Fairlee Lake 11-03-2015

Fairlee Lake 03 Nov 2015 (posted after my travels)

I’m told that when I hit the road next week for parts in the Northeast, I’m too late for the fall colors. The Vermont Tourist Bureau reports: “While most of Vermont has moved past peak foliage conditions, some great viewing remains in all regions, especially in the Champlain, Connecticut, and Taconic valleys. Vermont’s widespread northern hardwood forests are still showing some excellent late orange and red hues. There are many swaths of oak woodlands that are still quite green and promising to go russet, along with the still-developing bright yellows of the later-turning aspen species. As the last weeks of another great Vermont fall foliage season wind down, we look forward to the coming winter.” While lumber dealers tell us they don’t necessarily share the department of tourism’s view about looking forward to the coming winter, I’m looking forward to follow-up visits with them – and trust that as long as World Series baseball is still in play, it must still be fall!

~Introducing Funkify~

Some may recall the Funkpit era many moons ago. Those late night escapes/creative collaborations with lifelong musician friends would eventually move to the Funkloft, our jam space today above an old autobody paint shop on Marine Drive. Most recently, fellow jammer/songwriter/guitar virtuoso Dave Friend asked me to ready my saxophone – and home computer – to add horn tracks on a series of originals in the works called Funkify. Talk about fun! Hope you enjoy the first offering Waterfront Station, which also features Shael Wrinch on B3 organ:

Lumbering Along..

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:

Released: 2015-08-31

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