Lumber prices stay flat as sector braces for impact of wildfire season

Fri, July 11, 2014
The sheer confusion which reigned for dimension lumber buyer and sellers in June has dissipated, much as the dual Canada-US national holiday break has faded from memory. This week North American lumber traders reported stable sales volumes and a return to consistent pricing.

Almost on cue, serious wildfires broke out in several regions, a normal seasonal development. Industry players have been warning of significant damage to timber stands due to the combination of a five-year depression in lumber manufacturing, two decades of underfunded and undermanaged public forest land, and extended drought conditions.

The 28-mile Mills Canyon Fire burning in Washington State this week could lead to additional wildfire outbreaks, officials warn. As well, several hundred firefighters are working to contain the fire in Chelan County near Entiat, WA, which has threatened more than 200 homes and damaged a few structures. About 40 homes have been told to evacuate.

In Canada, a fast-moving wildfire in northeastern British Columbia is expected to double in size and is keeping about 200 oil-and-gas workers out of evacuated camps. The Red Deer Creek fire southeast of the mining community of Tumbler Ridge, BC, was sparked by a lightning strike on Sunday, grew to 650 hectares on Tuesday, and now covers 5,000 hectares, or about 50 square kilometres. Eighty firefighters are tackling those flames.

As well, access to some forested areas north of Banff, AB, has been temporarily restricted Friday morning due to a wildfire in the area. It prohibits all access in the affected area north of Banff and west of Rocky Mountain House, AB. Officials say that wildfire covers over 5,600 hectares of land.

Four Key Dimension Lumber Prices Graph

Lumber and panel prices were essentially flat to slightly up this week, as producers and wholesalers are generally agreed on the state of the current supply-demand balance. The price floor battled so hard over in June has been achieved.

Transportation on the rails improved over conditions earlier this year, as it did on the highways however trucks remain difficult to source.

In company news, an exterior conveyor assembly at Eacom Timber Corp’s sawmill in Timmins, ON, caught fire last Friday. No one was hurt in the small blaze and the mill appears to have sustained only minimal damage that will not affect overall operations. At last report the facility was back in operation on Tuesday of this week.

Domtar Corp. and UPM Wednesday announced that the companies have entered into an agreement for UPM to become the exclusive distributor of Domtar’s BioChoice™ lignin in Europe starting August 1st. sBioChoice, a by-product of the kraft pulping process, is produced at Domtar’s biorefinery in Plymouth, NC.

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