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

Want to volunteer during COVID-19? Here’s how to apply to the Queen Charlotte EOC

Young, healthy people can submit an online application to the Emergency Operations Centre

‘It was violating’: Skidegate fire department called to St. Patrick’s Day cemetery blaze

Queen Charlotte RCMP fire investigator says there was no evidence of arson

Masset RCMP seize ‘substantial’ amount of guns, cash in Friday the 13th drug bust

Officers executed search warrant on March 13 at ‘suspicious’ Old Massett Village residence

‘It makes people feel cared for’: Haida Gwaii food bank cooks up new freezer meal service

Containers needed for meals for vulnerable people, those in self-isolation amid COVID-19

BC Ferries able to restrict travel for sick passengers

Ferries working on schedule shifts to keep workers safe

B.C. couple celebrates 61st anniversary through seniors’ home window

Frank and Rena Phillips marked occasion at Nanaimo Seniors Village this week while social distancing

A look at some of the B.C. inventors creating life-saving tools in fight against COVID-19

Groups across B.C. are working together to create what they hope will help people affected by the pandemic

Association launches French-language games, online tools for families learning at home

Games, culture and vocabulary included in new virtual resources

‘There can be no ambiguity’: Travellers brought home to B.C. must self-isolate

Health Minister Adrian Dix said the mandatory isolation must be abided by

55+ BC Games cancelled amid COVID-19 concerns

Greater Victoria set to host 2021 event

BC Hydro offers three-month bill ‘holiday’ for those affected by COVID-19

Industrial customers can defer half of their power bills

Some April Fool’s Day jokes bring much-needed laughter; others tone deaf to COVID-19

Police are warning the public not to use the ongoing pandemic as a punchline

Canada’s 75% wage subsidy is coming, but not for several weeks: finance minister

Subsidy will cost Canada $71 billion, but push down cost of emergency benefit, Morneau said

Call before you dig into spring projects during isolation: BC 1 Call

BC 1 Call gives free checks for utilities in the area of a desired outdoor project

Most Read