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Year-end Answers – 2022

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1. Will more lumber traders discover benefits of practicing mindfulness as a tool to improve mental well-being with ever increasing, stress-inducing market volatility?
Dr Jon Kabit-Zinn could be describing the ever-wary lumber wholesaler when he tells us that our minds spend most of the time in the future, preoccupied with either worrying or planning. Founder of the life-altering Mindfulness-Based Stress Reduction (MBSR) program, Kabat-Zinn defines mindfulness as “paying attention on purpose in the present moment, non-judgmentally.” Mindfulness meditation apps exploded in popularity during the pandemic. It seems reasonable therefore to assume more lumber traders discovered the benefits of mindfulness this year in midst of a punishing, prolonged market correction still unfolding.

2. Will either U.S. or Canadian men’s soccer teams record satisfying results in the World Cup in Qatar this year?
Making the knockout stage of the World Cup is considered a win by many after both the US and Canada missed the tournament entirely in 2018. With that in mind, we would consider the US advancement to the knockout stage more satisfying than Canada’s failure to earn a single point. Canada’s thrilling, grueling journey to qualify for their first men’s World Cup since 1986 will be this fan’s lasting memory.

3. Will the labour pool for truckers grow in North America?
While the labour shortage for truckers has eased slightly in 2022 after more than 80% of TL carriers raised pay last year, the industry still faces its second largest number of vacancies on record. American Trucking Association Chief Economist Bob Costello expects the shortage of truckers to double by 2028.

4. Will the latest record-shattering lumber market run end differently this time?
The Random Lengths Framing Lumber Composite Price peaked in Q1 at $1334 (Mar. 10) before disintegrating month after month through year-end ($380 Dec. 27). It’s well understood that lumber markets generally take the stairs up and the elevator down (in 2021, the composite crashed from an all-time high of $1515 in May to $389 in August). Perhaps the only thing different this time was the long, winding trip down.

5. Will contemporary democracy be deemed viable in America by the end of 2022?
Yes, it is deemed viable still. Results in the US midterm election underscored the resiliency of the US democracy. At the same time, there is evidence of agreement across the political spectrum that problems like money politics, identity politics, wrangling between political parties, political polarization, social division, racial tension and the wealth gap have become more acute. It is not a partisan conclusion therefore to acknowledge that all of this has weakened the functioning of democracy in America. While politics may appear to be less strident or discordant north of the 49th, there is general acknowledgement that creeping authoritarianism across the globe is a growing threat to western democracies everywhere.

6. Will Putin’s Russia invade Ukraine?
Yes. On 24 February 2022, Russia invaded Ukraine in a major escalation of the Russo-Ukrainian War which began in 2014. Reports indicate it’s likely there are tens of thousands of deaths on both sides, while causing Europe’s largest refugee crisis since World War II.

7. Will the Old Growth logging deferral be an unresolved issue for B.C. by the end of 2022?
Yes.

8. Will pandemic woes be better or worse by end of 2022 in terms of impact on ‘normalizing’ our lives?
Covid variants are rising and new strains of respiratory flus are leading to hospitalizations that threaten overburdened healthcare systems. In terms of ‘normalizing’ our lives, there is ample evidence that ongoing programs of vaccination and common-sense health protective measures are playing out in most regions of the continent. We seem to be “living with it”. The same cannot be said for some countries such as China, where reported loosening of covid protocols is hardly deemed to be “normalizing” life.

9. Will the early lockout of Major League Baseball mean no summer ball? Should we care?
The MLB strike in 2022 ended March 10 with the signing of a new agreement. Issues raised between the league and union involved compensation for young players and limitations on tanking to receive higher draft picks. So there was a summer ball season. We might not have cared except for the Blue Jays exciting tease through October.

10. How will the accelerated pace of digital transformation across every organization alter collaboration between remote workers and office workers in the lumber industry in 2022?
Microsoft Teams has emerged as the cloud-based collaboration software of choice between remote workers and office workers in the industry. Further, the instant messaging and video meeting capabilities of remote communications platforms such as Microsoft Teams have helped close the geographical divide between lumber distributors and customers in all markets.

11. Will B.C.’s largest sawmill owners’ trend of expanding their investment in forestry operations south of the border increase unabated in 2022?
Last year set new records for lumber company acquisitions, with $2.2 billion of takeovers playing out in North America, more than the previous five years combined according to a report from analyst Paul Quinn, RBC Capital Markets. As early as March 2022, industry reports declared that investment banks were predicting Canada’s largest forest products companies would continue to expand south of the border by targeting privately-owned timberlands and sawmills. Early reporting by analyst Benoit Laprade of Scotia Capital showed that the enjoyment of excess cash flows early in the year underscored the economic attractiveness of acquisitions south of the border.

12. Will the longest reigning monarch in British history – Elizabeth II – be ruling over the British Commonwealth of Nations by the end of 2022?
Sadly, the answer is no. She was Queen of the United Kingdom and other Commonwealth realms, including Canada, from 6 February 1952 until her death 8 September 2022.

13. Will year-end survey ascertain that most lumber traders are in compliance with Center for Disease Control (CDC) recommendation of at least 7 hours sleep per night that is required for maintaining well-being and healthy life?
Our year-end survey at Dakeryn ascertained that most lumber traders are more likely to short their slumber than their lumber, by not being in compliance with CDC recommendation of at least 7 hours sleep per night. How trader sleep deprivation contributes to ill-advised market decisions or personal irritability remains an open question for another day, or year.

—
Am pleased to report that despite harsh winter weather in Vancouver before Christmas, we can pass along kudos to Dakeryn traders Daniel Binng and Phil Barter who shopped, assembled, and delivered company-record 50 food hampers to First United Church housing in Vancouver’s Downtown Eastside.

Year-end Answers

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As we approach year-end, you’ll recall 19 questions for 2019 we posed one year ago at Harderblog:

1. Will the railways be better prepared for winter weather conditions?
If lumber prices are any gauge, yes. In 2018, extreme cold temperatures in Q1 severely reduced rail capacity, driving lumber prices to all-time highs in Q2, 2018. In Q1 2019, comparatively muted lumber prices suggest overall network capacity improved.

2. Will the extreme price volatility in lumber markets this year persist in 2019?
No. In 2018, the Random Lengths Framing Lumber Composite Price peaked at $583 (June 5) before shedding a whopping $245 over four expensive months riddled with false starts, before finally bottoming at $338 Oct 30. In sharp contrast, this year the gap between the composite high ($378 in Feb) and low ($320 in June) was narrow. The composite currently sits at $373. Random Lengths recently described lumber markets through much of 2019 as “challenging and fickle” (Dec 20).

3. Will Justin Trudeau still be Canada’s prime minister after Canada’s federal election scheduled on or before October 21, 2019?
Yes, barely. Canada’s Liberal party under Justin Trudeau’s leadership won 157 seats to form a minority government and lost the majority they had won in the 2015 election. Trudeau’s Liberals formed a government while receiving less than 35 per cent of the national popular vote, the lowest percentage of the national popular vote of a governing party in Canadian history. The Conservative Party remains the official opposition with 121 seats. The Bloc Quebecois won 32 seats. The New Democratic Party won 24 seats.

4. Will Donald Trump still be America’s president by the same date?
Yes.

5. Will Beto O’Rourke or Joe Biden emerge as the leading Democratic presidential nominee for 2020 by the end of 2019?
Beto bid the race bye bye November 1 while polls still consider Biden the nervous front runner.

6. Will the 12 months of 2019 provide conclusive evidence that trade wars are “easy to win”?
Au contraire! Ongoing reporting reaffirms damaging, costly, induced complexities in play. While baby steps on resolving trade issues are reported, what’s been described by year end as a cold war on trade with China is evidence that “trade wars are not easy to win”.

7. Will noise about the border wall on the U.S. southern border have lessened by the end of 2019?
Yes, at least based on news reports beamed north of the 49th. Or, perhaps it’s simply being drowned out by ongoing competitive, attention-seeking noises spurred on by politics.

8. Will progress be reported in solutions for solving the opioid epidemic?
A US Center for Disease Control (CDC) spokesperson said provisional data and other reports signify that “progress is being made” in the opioid epidemic. According to the agency, the turnaround is said to be due to multisector efforts at the federal, state, and local level. USA Today reports progress here in the form of awareness. In BC, it’s reported here that through the first eight months of 2019, there was a 33% decrease in illicit drug toxicity deaths over the same eight-month period in 2018 (690 vs 1,037). Fentanyl was detected in more than 85% of overdose deaths in BC in 2018 and 2019. 

9. The American Psychiatric Association says anxiety levels jumped 7 per cent from 2017 to 2018. Will 2019 see a reduction in anxiety levels among the American general population?
No. For the second year in a row, about two in three Americans say they are extremely or somewhat anxious about keeping themselves and their family safe, paying bills, and their health, according to a new national poll here by the American Psychiatric Association (APA).

10. Will 2019 see a reduction in anxiety levels among continent-wide lumber distributors?
A survey of at least one lumber distributor’s office personnel revealed that lumber traders’ cheerful, positive disposition has been subjected to anxiety levels at least comparable to the stresses of a year ago.

11. Will Canadian softwood lumber exports to China (dropping each year since 2014) continue to decline?
Yes. In discussions last week with Russ Taylor, Managing Director, FEA Canada, he reported while exports to China were up 5.7% in the first nine months of 2019 YOY, shipments slowed down significantly in Q2 and Q3 due to high inventories. Taylor projects Q4 shipments in 2019 to be off roughly 50% YOY, resulting in a 5-10% decline overall this year. “For 2020, I see further declines in Canadian softwood lumber exports to China. Not only are there reduced volumes of low grades from BC, the huge surge in European log exports from the massive salvage program (wind-damaged and beetle-killed) to China (about 6.5 million m3 expected in 2019 vs 1.5 million m3 in 2018) is expected to saturate the construction lumber market by lumber produced at domestic Chinese mills. Not only will this depress construction (low grade) lumber prices, the huge volumes of damaged European logs will also keep imported log prices at low levels. Already the BC Coast logging industry is shut down for cost and market reasons – the market reasons are the surge in European log shipments to China that have pushed higher priced (and costed) hemlock logs out of the China market.”

12. Will an old-growth protection strategy be established in B.C.?
Maybe next year. According to a BC government report Oct 23, “As part of government’s new approach to managing old growth in British Columbia, a two-person, independent panel is engaging British Columbians to get input and hear perspectives on managing the province’s old growth forests for ecological, economic, and cultural values.” In July, the government protected 54 old growth trees by placing a meagre buffer zone around each of them. The action, considered to be more symbolic than symbiotic here, was described by BC Forests Minister Doug Donaldson as “the first step in a broader old-growth plan.” The public, organizations, and professionals are encouraged to share their thoughts by January 31st here.  

13. Will the accelerating rate of climate change evidenced in 2018 be exacerbated by global climate patterns experienced in 2019?
This week the Canadian Press dubbed climate change the news story of the year. The tell-tale signs and impacts of climate change – such as sea level rise, ice loss, and extreme weather – increased during 2015-2019, which is set to be the warmest five-year period on record, according to the World Meteorological Organization (WMO) here. Greenhouse gas concentrations in the atmosphere have also increased to record levels, locking in the warming trend for generations to come. Alluding to the challenge of meeting emission targets in a report this week here, Catherine Abreu, executive director of Climate Change Action Network Canada states “If we continue to ignore the root cause of climate change – extraction and combustion of fossil fuels – we’re going to keep missing the mark.”

14. Will the U.S. repeat as the FIFA Women’s World Cup Champions?
Yes. The U.S. defeated the Netherlands 2-0 in the most-watched FIFA Women’s World Cup match ever (82 million viewers). Over the 52 matches played in nine host cities across France, the average live match audience was over 17 million viewers, more than double the 8.39 million average of Canada in 2015.

15. Will the record number of homeless people identified in the City of Vancouver’s 2018 Homeless Count be broken again in 2019?
Sadly, yes. Volunteers counted 2,223 homeless people in the city this year, the highest number since the annual count began in 2005.

16. Will 2019 have seen an economic recession?
A recession is defined by a fall in trade and industrial activity in two successive quarters as measured by GDP. So while a UN flagship report in September signaled a slowing economy being fed largely by binge deficit spending, no ‘recession’ was declared in 2019. The UN’s trade and development body, Unctad, said 2019 will endure the weakest expansion in a decade and there was a risk of the slowdown turning into outright contraction in 2020. Source

17. Will Brexit status be significant in determining whether Britain is “better off” at the end of 2019 than at the end of 2018?
The majority Conservative electoral win earlier this month was significant to the degree that it allowed PM Boris Johnson to put in motion UK withdrawal Agreement from the EU set for January 31, when the post-Brexit transition period will begin. For 11 months, the UK will still follow all the EU’s rules and regulations; it will remain in the single market and the customs union, and the free movement of people will continue. The challenge for the government will be to get all its new rules and policies in place by the end of 2020. The answer as to whether or not Britain is “better off” remains unclear.

18. Will European lumber deliveries to the U.S. decline in 2019?
“Interesting dynamics here,” said Russ Taylor last week, with Q4 data TBD. “Through September 2019, European imports are 4.3% below the pace of 2018 and slowed down significantly in Q3 vs Q2 this year – probably as a result of weak US prices. However, with the China market getting over supplied and US lumber prices rising in Q4, I expect European imports to increase. If they matched Q4 levels in 2018, that would put them even with 2019. However, with a glut of moderate quality logs and rising US prices, I expect that Q4 European shipments will be up significantly over Q3 levels, and even higher than Q4 levels from 2018, resulting in a small increase for 2019. In our just-released Global Sawmill Cost Benchmarking Report, the cost structure of the German and Czech mills has dropped by US$100/MFBM due to lower log costs (and more at some mills), allowing for easy access to the US market at very profitable levels. So I expect Central European exports to soar in 2020, especially if lumber prices improve (FEA forecasts a 10% increase over 2019).”

19. In view of lower lumber prices, will we see movement in the Canada-U.S. softwood lumber dispute?
No significant movement reported. When reached for comment, Susan Yurkovich, President and CEO of the BC Council of Forest Industries, confirmed “Sadly no. Litigation will continue.”

View from The Observatory, atop Grouse Mountain (early evening 27 Dec 2019)

Sticker Shock

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After hitting a 20-year high in 2017 ($440 October 10), the Random Lengths Framing Lumber Composite Price has snowplowed even higher this winter, reaching $458 Friday. SPF 2×4 #2&Btr is $502, a record high. “Shaking their heads – some in near disbelief..” — that’s how Random Lengths describes ever-wary lumber traders in their Weekly Report on North American Forest Products Markets (19 Jan 2018).

Last week a good U.S. customer, in response to a partial quote, asked: “Where are they hiding all the wood?” I posed the question to Russ Taylor, Managing Director, Forest Economic Advisors Canada. Russ notes Canadian shipments are already limited by tightening timber harvests in the B.C. Interior and Quebec. And with Canadian softwood lumber exports further constrained by cross-border duties, FEA-Canada projects Canadian shipments to the U.S. to shrink even more, up to 7% through 2019. Russ confirmed the additional North American lumber production required to satisfy U.S. demand will need to come from U.S. mills. Russ considers projections for U.S. mill shipments to grow 15%, from 34.0 billion FBM in 2017 to over 39 billion FBM in 2019, “an aggressive target.”

When Russ then reiterated FEA-Canada’s most recent five-year outlook quoted below with permission, I was reminded of the comments John Innes, Dean of the Faculty of Forestry, UBC made back in 2012: “What people seem to forget – and I don’t really understand this – is that there was extra capacity created to process this lumber when the beetle reached its peak. Surely people then realized that this was a temporary thing; that it wasn’t going to last.” See: Firm Offers?

U.S. demand will be leaning more heavily on expansions in U.S. production and European lumber imports in the 2018-19 period. Production increases in the U.S. will be subject to many factors, including lumber prices, log supply and costs, financing, supply chain dynamics (including loggers and sawmill workers) etc. This means we could see varying supply responses in different regions of the U.S., and at different times.

As we have been forecasting for the last few years (and again this year), there does not seem to be nearly enough available softwood lumber capacity in North America to meet U.S. demand by the end of the decade. While the slower pace of housing starts has somewhat delayed any potential ‘supply gap’ in the last few years, the burden of import duties on Canadian lumber shipments to the U.S. has now exacerbated this situation (starting in 2017). We predict that incremental supplies of logs and lumber will be required each year, and that high lumber prices will result and attract more supply; in 2020 and beyond, there is strong potential for even higher lumber prices.

 

Breaking: SLB-funded initiatives generated 1.02 billion board feet of incremental softwood lumber demand in 2017.

https://giphy.com/embed/3ohs4w0cY60YNTinIY

Year-end Answers

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As we approach year-end, you’ll recall 17 questions for 2017 we posed one year ago at Harderblog:

1. (See Question #1 from 2016)
Yes.

2. Will Trump really build a wall and have Mexico pay for it?
No. It’s reported the promised border wall amounts to eight prototypes sitting in a desert outside San Diego. Mexico hasn’t contributed a peso and no funding has been appropriated by Congress to advance the project beyond the testing phase.

3. Will the softwood lumber dispute have found a satisfactory resolution?
At the 2017 COFI Convention in Vancouver, David Emerson, B.C.’s Trade Envoy to the United States, described the ongoing softwood lumber dispute as “a mutating form of bacteria that has all but become antibiotic-resistant.” In the face of a dwindling resource and increasing demand for softwood worldwide, effective today the combined CVD/AD duty paid by most Canadian importers to the U.S. Customs and Border Protection Agency will be 20.23%, calculated on the selling price.

4. Will anticipated countervailing duties on Canadian softwood lumber shipments to the U.S. be applied retroactively?
No. While the USDOC concluded in April that “critical circumstances” existed (justifying the charging of duties retroactively 90 days), by early December the USITC had announced a negative finding concerning critical circumstances.

5. Will Trump really pull the U.S. out of the Paris Climate Change Agreement?
Yes.

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?
A poll of traders in Dakeryn’s office says “yes” to this question.

7. Will Trump really pull the U.S. out of the Iran Nuclear Deal?
No.

8. Will there be 100 million consumers shopping in augmented reality (AR) by the end of 2017?
Maybe not yet. However we’re told here “shoppers are beginning to give AR more attention, particularly when viewing function-driven, feature rich, high-consideration purchases such as furniture. Voice technology, augmented reality, and artificial intelligence are transforming the retail industry to make buying products quicker, easier and more enjoyable.”

9. Will a measure of sanity return to the Vancouver housing market?
No, although, as a major news story, rental-housing woes in Vancouver eclipsed angst over the climbing cost of homeownership. In 2017, it’s reported the average rent for a one-bedroom apartment listing in this city surpassed $2,000 per month.

10. Will the record number of homeless people identified in the City of Vancouver’s 2016 Homeless Count be broken again in 2017?
Yes. The record-breaking 2,138 homeless people counted in Vancouver this year is 291 more than the previous record of 1,847 homeless people counted in 2016. At 448, Aboriginal peoples are once again over-represented in the number of homeless people living in Vancouver.

11. Will tensions with China escalate over trade and Taiwan?
Trade issues loomed large on many fronts in 2017. The U.S. opting out of the Trans Pacific Partnership headlined trade-related news in Asia.

12. In light of increased hacking of connected products, will questions surrounding cybersecurity have become a make-or-break issue by the end of 2017?
Yes. In fact 2017 has been described as “the year of cybersecurity wake-up calls”. Recent examples show disturbing trends.

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?
See Corrections.

14. Will anybody care if the Vancouver Canucks fail to make the Stanley Cup Playoffs?
Vancouver Canucks attendance figures are said to be the lowest since 2001.

15. Will BC Premier Christy Clark’s Liberal Party secure a fifth term in May?
No.

16. Will the global crises surrounding issues of displaced peoples/refugees have eased anywhere?
See: Why nothing will stop people from migrating.

17. Will general predictions forecasting a “bumpy ride” for 2017 come to fruition?
See: Are you day trading?

Final AD/CVD Rates

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Hard to rationalize. Where does the characterization of ‘dumping’ come in as a rationale in the prevailing supply-demand scenario?
Here is today’s report from Inside U.S. Trade’s World Trade Online (2 Nov 2017):

With the U.S. and Canada unable to reach a long-term settlement, the Commerce Department on Thursday announced affirmative final determinations in antidumping and countervailing duty investigations of softwood lumber imports from Canada.

The announcement prompted Canada to threaten litigation through the North American Free Trade Agreement or the World Trade Organization.

“While significant efforts were made by the United States and Canada, and the respective softwood lumber industries, to reach a long-term settlement to this on-going trade dispute, the parties were unable to agree upon terms that were mutually acceptable,” Commerce said in a statement. “As a result, the investigations were continued and Commerce reached its final determinations.”

Commerce said it determined that exporters from Canada have sold softwood lumber in the U.S. at 3.20 percent to 8.89 percent less than fair value. It also said Canada was providing unfair subsidies to its softwood lumber producers at rates from 3.34 percent to 18.19 percent.

The department will instruct Customs and Border Protection to collect cash deposits from lumber importers based on those final rates.

A fact sheet issued by the department noted that it found “critical circumstances” in the AD investigation for certain Canadian exporters but not others. “Consequently, Commerce will instruct CBP to impose provisional measures retroactively on entries of softwood lumber from Canada, effective 90 days prior to publication of the preliminary determination in the Federal Register, for the affected producers and exporters,” the fact sheet states.

It also notes that certain softwood lumber products “certified by the Atlantic Lumber Board (ALB) as being first produced in the Provinces of Newfoundland and Labrador, Nova Scotia, or Prince Edward Island (the Atlantic Provinces) from logs harvested in these three provinces should be excluded from the scope of the AD and CVD investigations.”

Commerce Secretary Wilbur Ross said that while he was “disappointed that a negotiated agreement could not be made between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada.” He said the U.S. decision was “based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices.”

Ross had been negotiating with Canada in the hopes of reaching a suspension agreement and pushed the final determination deadline from late August to November.

“I remain hopeful that we can reach a negotiated solution that satisfies the concerns of all parties,” Ross said on Aug. 29, announcing the extension through Nov. 14, which he said “could provide the time needed to address the complex issues at hand and to reach an equitable and durable suspension agreement.”

But Ross in June received criticism from the U.S. lumber industry when he tried to negotiate with the Canadians because, sources said then, the positions he outlined ran counter to the longstanding U.S. demand for a quota-only approach and would therefore undermine the U.S. negotiating position.

One source told Inside U.S. Trade in June that Ross “would like to get it off the table one way or the other,” before NAFTA renegotiation talks began in August. But, the source said, “Ross doesn’t know how complicated this is.”

Industry and government sources claimed Ross’s department was lacking the expertise needed in dealing with the file and doubted that Ross would be able to reach an agreement before the final determinations were set to be made.

Softwood lumber from Canada were estimated to be worth $5.66 billion in 2016, Commerce said.

The U.S. Lumber Coalition, which kicked off the case in November 2016, lauded the Commerce determinations. “We are pleased the U.S. government is enforcing our trade laws so that the U.S. lumber industry can compete on a level playing field,” the group’s co-chair, Jason Brochu, said in a statement. “The massive subsidies the Canadian government provides to their lumber industries have caused real harm to U.S. producers and their workers. With a fair-trade environment, the U.S. industry, and the 350,000 hardworking men and women who support it, have the ability to grow production to meet much more of our country’s softwood lumber demand.”

Canada, meanwhile, blasted the move in a statement issued by Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr.

“The Government of Canada will continue to vigorously defend our industry against protectionist trade measures,” they said, calling the duties “unfair, unwarranted and deeply troubling.”

“We will forcefully defend Canada’s softwood lumber industry, including through litigation, and we expect to prevail as we have in the past,” they added. “We are reviewing our options, including legal action through the North American Free Trade Agreement and the World Trade Organization, and we will not delay in taking action.”

Carr and Freeland also said they would “continue to engage our American counterparts to encourage them to come to a durable negotiated agreement on softwood lumber.”

If the U.S. International Trade Commission makes affirmative final injury determinations in the softwood lumber case, Commerce said, the department will issue AD and CVD orders. A negative final injury determination will terminate the investigation with no duties assessed.

The ITC is set to make its final determinations by Dec. 18

BREAKING NEWS

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Some of us might wonder if the North American Wholesale Lumber Association risks upstaging CNN and Wolf Blitzer with BREAKING NEWS when the 2017 NAWLA Regional Meeting convenes in Vancouver next week. We can’t be sure of that. Although the anticipated public announcement of the U.S. Department of Commerce preliminary CVD ruling April 25th against Canadian softwood lumber imports is expected to draw a full house to the NAWLA gathering two days later, April 27th. An expert panel’s assessment of implications of the preliminary ruling is sure to attract heightened interest:

  • Jason Fisher, Associate Deputy Minister, Forest Sector at B.C. Ministry of Forests
  • Susan Yurkovich, President & CEO, B.C. Council of Forest Industries
  • Duncan Davies, President & CEO, Interfor Corporation

For more information, visit the NAWLA Vancouver Regional Meeting webpage here.

Update from NAWLA (April 25):  The 2017 Vancouver Regional Meeting has reached capacity and is unable to accept additional registrants at this time. The wait list for this event is also now full. Only those who are on the attendee list will be granted access to this event.

Think Harder

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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..”

~~~

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

Northwestern EXPO

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“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.

~~

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?”

Lauren Chimko, Lumber Trader
With Northwestern Lumber Association President Cody Nuernberg at the breakfast session

Lumber Super Bowl

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This year, Dakeryn has decided against buying TV ad time for the Super Bowl. The decision is based on analysis of how to most effectively nurture the relationships with our valued customers and supplying mills. It could be that the $5 million-plus cost for a 30-second ad played into the decision as well. But that hasn’t deterred 84 Lumber. According to this report at Adweek, 84 Lumber will make its Super Bowl advertising debut just before halftime of this year’s event – the only brand to purchase more than a minute of airtime for a single spot.

We’re told the purpose of the ad is to launch a year-long campaign focused on recruitment, targeting men aged 20 to 29. According to the report, 84 Lumber includes some 250 locations across 30 states and made Forbes’ 2016 list of “Largest Private Companies in America.” It is also one of the biggest such businesses run by a woman; Hardy Magerko was chosen by her father at the age of 27 to lead the company he founded in 1956.

Our industry is going through a period of extreme disruption. And I’ve always preferred to be the one doing the disrupting, rather than the one being disrupted. But to do that, we need to hire and train people differently. We need to cast a wider net, and to let the world know that 84 Lumber is a place for people who don’t always fit nicely into a box.
– Maggie Magerko

Softwood Talk, or not.

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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~