(Bloomberg) -- Lumber prices that have soared amid a Canada-U.S. trade dispute could rise even higher after a fire at a British Columbia sawmill cuts supplies.
Futures are trading at a 23-year high amid rising demand for housing and after the U.S. imposed tariffs on softwood imports from Canada. The rally could extend after a major fire at Tolko Industries' Lakeview mill, which accounts for about 2 percent of production in British Columbia's interior, CIBC analyst Hamir Patel said Monday in a note.
Canada is the world's largest softwood lumber exporter and the U.S. is its biggest market. Lumber futures have gained as much as 40 percent this year to $459.60 per 1,000 board feet, the second-best performing commodity, according to data tracked by Bloomberg. Some Canadian sawmills are raising prices above $500 in an effort to offset countervailing duties of 14.25 percent and anti-dumping duties of 6.58 percent, according to Kevin Mason, managing director of Vancouver-based ERA Forest Products Research.
They are “hoping to jack up prices at the Canadian mills to offset final duties,” Mason said in an email.
To contact the reporter on this story: Jen Skerritt in Winnipeg at jskerritt1@bloomberg.net.
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Millie Munshi, Patrick McKiernan
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