Softwood lumber is pictured at Tolko Industries in Heffley Creek, B.C., on April, 1, 2018. THE CANADIAN PRESS/Jonathan Hayward

Lumber company shares rise on news U.S. intends to cut softwood duties

CIBC analyst suggests average U.S. duties to drop from US$67 per thousand board feet to US$30

Shares in Canadian lumber companies rose Tuesday on news that the U.S. government could reduce duties on softwood lumber imports in August.

In early trading in Toronto on Tuesday, Canfor Corp. stock rose as much as 7.5 per cent, West Fraser Timber Co. Ltd. jumped by 6.2 per cent and Resolute Forest Products Inc. was up three per cent.

The shares closed at lower levels, with Canfor up 4.3 per cent, West Fraser up 2.1 per cent and Resolute down 5.2 per cent.

In a report on Monday, CIBC analyst Hamir Patel suggested average U.S. duties would drop from about US$67 per thousand board feet to about US$30 based on current pricing levels of about US$400.

“According to trade contacts, preliminary revised duty determinations from the U.S. government have been communicated to the Canadian industry,” Patel said.

“We expect Canadian lumber equities to respond positively to this news as these rate revisions were better than most Canadian industry participants were expecting.”

West Fraser’s rate may fall from 23.6 to 9.1 per cent, Canfor’s from 20.5 to 4.6 per cent and Resolute’s from 17.9 to 15.8 per cent, he said.

The report says the “all others” duty rate could fall to eight per cent from 20.2 per cent, but added it’s not expected that Canadian companies will receive any refund or credit for overpayment until the trade dispute is resolved, something not expected for two to three years.

A U.S. Commerce department spokesman confirmed on Tuesday that preliminary results of an administration review were issued on Monday but said the impact on softwood lumber deposit rates are not yet determined.

READ MORE: Canfor shareholders reject Pattison’s takeover offer

The U.S. imposed duties on most Canadian softwood exports in April 2017, alleging that Canada was unfairly subsidizing its industry and dumping wood into the U.S. at unfair prices.

This is the fifth time Canada and the U.S. have fought over the same issues.

In September, a joint Canada-U.S. trade panel gave the United States 90 days to rethink its tariffs, finding there was no evidence Canadian imports were causing injury to the U.S. industry.

The Canadian Press

Like us on Facebook and follow us on Twitter

softwood lumber

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Interior Health leading the way with innovative therapy for stroke patients

Percentage of ischemic stroke patients who received treatment has risen dramatically

Barriere council begins 2020 budget talks

Next 2020 budget meeting to be held March 2. Public is welcome to attend.

Kamloops RCMP look for man who may have been heading to 100 Mile House

Rudolph “Rudy” Kobzey was planning to head to 100 Mile House to visit a friend

Clearwater mayor unimpressed with Forest Minister’s inaction on local tenure transfer

Mayor Merlin Blackwell says he’s ready to lead delegation to Victoria

Valley Voice: Remembering the tools of yesteryear

Barriere and District Heritage Society talks about a few mundane modern tasks that were once laborous and time consuming

Clothing, jewelry, purses: RCMP ask court about disposal of evidence in Robert Pickton case

Pickton was sentenced to life with no chance of parole for 25 years for the murders of six women

Wet’suwet’en hereditary chiefs optimistic ahead of talks with feds, province

Discussions with provincial and federal governments expected to start later today

‘The project is proceeding’: Horgan resolute in support of northern B.C. pipeline

B.C. premier speaks as talks scheduled with Wet’suwet’en hereditary chiefs

BREAKING: Kelowna RCMP to further investigate 12 sexual assault cases, create sexual assault unit

Recommendations come five months after it was revealed 40% of sexual assaults were deemed ‘unfounded’

Explicit Greta sticker linked to Alberta company draws outrage

The sticker includes the logo of Red Deer-based X-Site Energy Services

Share Now, formerly Car2Go, leaves Canada with valuable data in changing market: expert

Vancouver was its largest market in North America, with more than 300,000 customers

Off-duty RCMP officer helps catch Cache Creek car thief

‘This is just one example of how we are always ready to respond to emergencies’

What’s happening: Coronavirus forges on, as world hunts solutions

Japan closes all elementary, middle and high schools until spring holidays in late March

Most Read