Lumber yard at Babine Forest Products, near Burns Lake, B.C. (File)

Closed mills, housing surge support a positive forecast for lumber industries

B.C. lumber producers have closed mills accounting for 18% of province’s capacity, RBC report says

Financial analysts say Canadian production cutbacks and a consumer-driven recovery in housing starts in the U.S. could mean better times for lumber and panel products this year.

In a research report, RBC analyst Paul Quinn estimates B.C. lumber producers have permanently closed mills accounting for 18 per cent of the province’s capacity, a move that is expected to help to bring North American supply in line with demand and support price increases.

He adds the closure of three oriented strandboard mills and part of another has removed about 9.5 per cent of North American OSB capacity.

RBC is forecasting that U.S. housing starts will increase by about 2.5 per cent this year to 1.3 million units, driven by strength in single-family housing, and there will be further gains in lumber demand from the adoption of “mass timber” methods which allow construction of taller wooden buildings.

Meanwhile, CIBC analysts are also bullish on the lumber sector in North America, given stronger housing starts this year and their estimate of a five per cent decline in supply from last year.

In a report, they say they expect a robust spring selling season, with lumber prices and producer share prices likely to rise.

“2019 was one of the worst years in memory for lumber and OSB companies, with most reporting significant declines in profitability and seeing their equity value deteriorate,” noted RBC’s Quinn.

“However, a number of positive developments have us feeling increasingly bullish.”

The Canadian Press

Like us on Facebook and follow us on Twitter

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

Just Posted

Work begins on Otter Point Road project in Sooke

The project now has a fall completion date following a long delay

First Nation dispute closes part of school parking lot in Sooke

T’Sou-ke’s George family now in negotiation with School District

Life complicated when water not secure

Water issues have real-life impacts in Sooke Region

Saanich dog walkers react to potential review of bylaws allowing off-leash dogs on beaches

Focus should have remained on migratory birds, not on dog behaviour, says Cadboro Bay dog walker

No dogs allowed off-leash at Luxton Fairgrounds in Langford

New sign placed by Metchosin Farmers Institute on Wednesday, Feb. 19

VIDEO: Feds warned agricultural sector near ‘tipping point’ due to blockades

Canadian Federation of Agriculture points to lack of propane and feed due to Coastal GasLink dispute

B.C. terminates contract with hospice society refusing assisted death

Delta Hospice Society loses hospital service fund of $1.5 million

Child in hospital following fatal crash that killed father, sibling on B.C. highway

The single vehicle crash occured near Kamloops on Highway 5A

‘Die!’: Vernon councillor mailed death threat

Three months later, city official Coun. Dalvir Nahal said she’s more angry than anything

Hidden message connects Castlegar homeowners decades apart

The Rodgers family was surprised when a message fell out of the walls as they were renovating

Two B.C. men plead guilty to bus-terminal assault of man with autism in Ontario

Parmvir Chahil and Jaspaul Uppal due to be sentenced in June for aggravated assault

B.C. Liberals call for assistance on soaring strata insurance rates

NDP’s Carole James says problem is across the country

‘Intemperate, insulting’: B.C. teacher reprimanded for online comments about religion

John William Yetman made the comments in response to a Facebook invitation to Open Mosque Day B.C.

Most Read