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

Cookies and kindness delivered to Maple Ridge seniors in isolation

An Albion boy with autism uses his artistic skills to bring smiles to those in a local care home

Pet owners encouraged to be proactive in caring for their animals

Maple Ridge SPCA shelter is closed to the public, but adoptions and fostering are still possible

LETTER: Parent, have a serious discussion with your children, please

Teens seen strolling together, up-close, and failing to abide by social distancing rules

LETTER: Maple Ridge cyclist appreciative of strangers’ kindness

Thanks to the nurse and others who came to injured biker’s aid

LETTER: Please use common sense in dealing with COVID

Aspiring artists wants people to follow the rules to help keep everyone safe

‘Better days will return’: Queen Elizabeth delivers message amid COVID-19 pandemic

The Queen said crisis reminds her of her first address during World War II in 1940

Emergency aid portal opens Monday, cash could be in bank accounts by end of week: Trudeau

Emergency benefit will provide $2,000 a month for those who have lost their income due to COVID-19

Education, not enforcement: B.C. bylaw officers keeping a watch on physical distancing

A kind word, it turns out, has usually been all people need to hear

COVID-19: Hospitals remain safe for childbirth, say Vancouver Island care providers

North Island Hospital has been asked to share its perinatal COVID-19 response plan

Insurance shock for B.C. condo owners

Claim-free two-year-old townhouse complex told premium will nearly triple

Canadian cadets to mark 103rd anniversary of Vimy Ridge April 9 virtually

Idea of Captain Billie Sheridan in Williams Lake, B.C. who wondered what to do in times of COVID-19

B.C. VIEWS: Pandemic shows need for adequate care home staffing

Seniors in B.C. care homes face challenging times

Most Read