Alternative Facts?

Revised data that corrects a “massive” disparity in Canadian softwood lumber shipment volumes to the United States in 2016 could significantly impact countervailing and/or anti-dumping duty cases. According to Random Lengths, statistics gathered through the U.S. Census Bureau had reported that imports from Canada were 16.065 billion board feet in 2016. Figures from Statistics Canada indicated Canadian shipments to the U.S. were 14.954 billion board feet. “The gap between the two sets of data of 1.11 bbf, or 7%, was massive by historical standards. The discrepancy surfaced late in the first quarter last year, and grew as wide as 10%” (Random Lengths International Report, March 15). We’re told a number of downward adjustments released yesterday by the U.S. Census Bureau which included SPF, Western Red Cedar, and Douglas Fir shipments, brings the U.S. import statistics in accord with Canadian export data.

Think Harder

Market Minute: Amidst the Canada-U.S. softwood lumber dispute, underlying strong demand on both sides of the border seems to be catching buyers unawares on many fronts. There are reports this week that some mills in B.C. are extending order files to unprecedented levels. In their February 8, 2017 Industry Update, CIBC Capital Markets describes dramatic lumber price increases since February 1 as “an encouraging sign for producers’ ability to pass on duties to U.S. consumers when tariffs are actually imposed.. considering we are only in partial retroactive territory, and we still have no idea how high Commerce will set initial duties..”

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There are many joys in blogging. We appreciate that cyberspace offers bloggers virtually unlimited latitude in expression and range of viewpoints. The medium can be a useful tool in support of business and development of customer relationships. In these days of heightened political sensitivities and polarized opinions, it’s evident that messaging via any medium creates perception of opportunity as well as risk. Measuring effectiveness may call for nuance. It’s interesting to read of the early feedback on the Super Bowl ad of our friends at 84 Lumber.

Of course daily now we’re exposed to direct messaging of folks marching in the streets, advertising a particular point of view or belief on, what is often a hastily-scratched message on cardboard. Through six years, I have found Harderblog to be a positive experience and useful medium for periodic messaging in support of lumber marketing here at Dakeryn Industries. Some might suggest that the messaging here is no more effective than if I decided to march in the streets with a placard advertising personal beliefs in support of the value-added services we provide. But then I took heart in affirmation of my beliefs on that score when I saw the image below. My only suggestion is that if I were a sign-carrying marcher in that parade I’d suggest a small revision to make it read: If you believe in lumber, think Harder…

best-damn-photos-beliefs-sign-fit

image source: brobible.com

Sawmill Shutdowns etc.

“More sawmills will be shut down in BC,”  says Hakan Ekstrom of the Seattle forestry consulting firm Wood Resources International, in the Victoria Times Colonist. “The question is, will it be three, four, five, or six sawmills?”

The report, from the January 19 Western Forest Industry Conference in Vancouver, Washington, cites details on the fallout from the pine beetle infestation, a major factor behind the shrinking sustainable harvest rate/annual allowable cut (AAC) in this province. The most significant impact will be felt in the BC Interior, where it’s estimated 80-90 per cent of merchantable pine was killed. Salvage logging in the region is winding down as the availability of economic, beetle-killed timber peters out. While AAC reductions were anticipated, “it was always somewhere in the future,” said Ekstrom. “Now it is actually going to happen.” BC’s chief forester is expected to announce cutbacks in Quesnel in March, Prince George in June, and Lakes, west of Prince George, in late 2017.

Meanwhile, economic forecasts suggest US housing starts will continue to climb in 2017. In China, softwood lumber imports reached an all-time high in 2016, “fueled by growing demand for use of lumber in the furniture, door, window and finishing segments” (International Wood Markets 1/23/17). At the same time, questions related to how optimism for overall demand will play out in the face of the Canada-United States softwood lumber dispute, as curtailments and shutdowns loom, remain unanswered.

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Anyone know where this tree is located? We can probably rule out Quesnel. Its certainly got a mind of its own, with a natural defence against sawmills bent on producing dimension lumber free of crook.  Update: Solved! The tree is located in Kona, Hawaii, at the Kona Country Club. Thanks to Ian White of Dakeryn Industries, who even shared his own picture of this tree!

best-damn-photos-twisty-palm-tree

Northwestern EXPO

“Tune in!” shouted Mike Foley, Certified Speaking Professional and founder of Clarity Central, keynote speaker yesterday at the Northwestern Building Products EXPO in Bloomington, Minnesota. That’s how Mike suggests we differentiate ourselves in a world where everyone is distracted, overwhelmed, overworked – and no one is present. “Tune in to your kid, your boss, your partner, your customer,” said Mike, while noting the attention span of a millennial (8 seconds) is shorter than the attention span of a goldfish (9 seconds).

In his breakfast presentation, Mike expanded on his four keys to “letting go” and “losing the junk in our trunk”: grow your comfort zone, find your balance, manage your mind, lighten your load. It was a fast-paced workshop. One memorable round table exercise quickly revealed how growth can only occur outside the comfort zone, in “the stress zone”. How to manage your mind? “Become a fine connoisseur of the present moment! Where do you live? In the past, present, or future? How does this affect your life? How would it change if you lived moment to moment?” His segment on the importance of credibility and balance – “responding skillfully” – was perhaps most relevant to many attendees engaged in lumber trading.

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Market Minute

While Dakeryn has been an associate member of the Northwestern Lumber Association for a number of years, this was our first time attending and exhibiting at the Northwestern Building Products EXPO. Held at the DoubleTree by Hilton Hotel in Bloomington, MN, the show was tight and upbeat. Virtually every key US distributor in the region was represented. Most retail dealers in attendance acknowledged that business was ticking along – unseasonably steady for January. While the show’s slogan was A World of Opportunities, the majority of Midwest lumber dealers we spoke with openly expressed apprehension over looming cross-border trade constraints. Most-asked question: “What’s going to happen?”

Softwood Talk, or not.

According to weekend reports, the US International Trade Commission determined Friday there is indication of injury from imports of softwood lumber products from Canada. Perhaps the market is sensing that a resolution will ultimately be found in a negotiated, managed trade agreement, but probably not before duties are in place. By May? In the face of the looming threat of retroactive duties, cross-border shipments continue largely unabated as mills and distributors weigh decisions impacting trading activity into February.

Meanwhile, Random Lengths reports word of “sizable inventories in US reloads”. No doubt we’ll soon find out if this is the case. If history is any guide, building mountains of inventory in advance of duties/export taxes/quota is anything but a speculative “no-brainer”. We’ve all seen the movie. Still, dealer demand for lumber in the United States, albeit hand-to-mouth – has been surprisingly buoyant so far this winter. Certainly some items are in abundant supply – on both sides of the border. But in this uncertain environment, over time, it seems any items in tight supply today would become even scarcer when Canadian shipments are eventually constrained.

Meanwhile, the US Department of Commerce investigations continue; the countervailing duty determination is expected February 20, while the preliminary antidumping duty determination is expected May 4.

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Memorial South Park, Vancouver – New Year’s Day

 

~Musical Refreshment~

17 Questions for 2017

Here are 17 questions that Harderblog will be watching in 2017, in search of answers:

  1. (See Question #1 from last year)
  2. Will Trump really build a wall and have Mexico pay for it?
  3. Will the softwood lumber dispute have found a satisfactory resolution?
  4. Will anticipated countervailing duties on Canadian softwood lumber shipments to the US be applied retroactively?
  5. Will Trump really pull the US out of the Paris Climate Change Agreement?
  6. In the face of “Fake News” and misinformation that poses distraction to sound decision formulation on many fronts, will lumber dealers lean more heavily than ever on trusted wholesale relationships to interpret market changes?
  7. Will Trump really pull the US out of the Iran Nuclear Deal?
  8. Will there be 100 million consumers shopping in augmented reality (AR) by the end of 2017?
  9. Will a measure of sanity return to the Vancouver housing market?
  10. Will the record number of homeless people identified in the City of Vancouver’s 2016 Homeless Count be broken again in 2017?
  11. Will tensions with China escalate over trade and Taiwan?
  12. In light of increased hacking of connected products, will questions surrounding cyber security have become a make-or-break issue by the end of 2017?
  13. Is there any indication that by the end of 2017 a future of driverless transport trucks could promise enhanced just-in-time lumber deliveries?
  14. Will anybody care if the Vancouver Canucks fail to make the Stanley Cup Playoffs?
  15. Will BC Premier Christy Clark’s Liberal Party secure a fifth term in May?
  16. Will the global crises surrounding issues of displaced peoples/refugees have eased anywhere?
  17. Will general predictions forecasting a “bumpy ride” for 2017 come to fruition?

 

new-year

Q&A – 2016 Edition

Of the Top Ten Questions for 2016 posed at Harderblog one year ago, the first five have been satisfactorily answered for us:

1. Will the Trump presidential campaign have staying power beyond March?
See November election results.

2. Will the US make history by electing a woman as president for the first time?
No.

3. Will BC softwood log exports to Mainland China eclipse BC softwood lumber exports?
For the answer to this question, we turned to Russ Taylor, President, WOOD MARKETS. “Interesting question, but lumber export volumes to China have always been much higher than logs. The gap is narrowing, but lumber export volumes are still much higher.” Russ confirms BC softwood exports to China through October as follows: Logs = 3.0 million m3 vs 2.43 million m3 in 2015 (+23%); Lumber = 5.0 million m3 vs 5.49 million m3 in 2015 (-9%). Of course, log exports even south of the border continue to be a contentious issue.

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4. Will a new Softwood Lumber Agreement be reached between Canada and the United States before the standstill period ends October 13?
No. By early October, we were told talks had entered the days of magical thinking. And while the US Lumber Coalition’s submission of their petition to the US Department of Commerce was predictable, the November 25 timing caught markets by surprise. At least one forest analyst suggested “it put a whole new spin on Black Friday.”

5. Is this the year virtual reality goes mainstream?
As the cost of development falls, we’re told virtual reality is in fact beginning to move into the mainstream. However, it’s reported that most console headsets are still “device-exclusive”. And flaws in these controllers actually tempered demand in 2016, leading Tech Digest to ask will virtual reality finally become mainstream in 2017?