Despite its vast and mature forests, Saskatchewan forestlands have been under-utilized. That is until now. Over the past several weeks, the province has announced a reallocation of its forest resources, primarily located north of Saskatoon, and that will result in sizeable forest industry investments. Those forestland reallocations are expected, over the next two years, to lead to over a $1 billion dollars (CAD) in new investments in Saskatchewan’s forest industry.
According to the Bureau of Labor Statistics’ (BLS) latest Producer Price Index (PPI), which was released on Thursday (1-13-22) with additional analysis provided by the National Association of Home Builders (NAHB), reveals that the price of goods used in residential construction, less energy, climbed 1.5% in December (not seasonally adjusted). The index was driven higher by a significant price increase for wood products.
On Thursday, January 6, 2022, the Department of Commerce (DOC) amended its notice of final results of the 2019 administrative review of the countervailing duty (CVD) order. In the amendment, the DOC stated they had incorrectly calculated J.D. Irving and West Fraser’s CVD rates. The new CVD rates are 3.46% and 5.08%, respectively.
With the U.S. economy and employment growing robustly in 2021 and 2022, interest rates remaining low by historical standards, many of the supply-side constraints that held back housing over the past half-decade resolved, and high pent-up demand, Jannke says that he expects housing starts will continue to grow from an average of 1.584 million units in 2021 to 1.618 million in 2022. Ultimately, he expects lumber prices will continue to be volatile in 2022.
The National Association of Home Builders (NAHB) has provided a deeper look into the relationship between U.S. domestic sawmills’ inability to increase output to meet growing demand since mid-2020 and the resulting lack of new home availability. The NAHB cites the lack of increased domestic sawmill activity as one of the primary factors that has contributed to record high lumber and panel prices and continuing price volatility in both the lumber and housing markets.
One Equity Partners, a New York City-based middle market private equity firm, announced today (1-6-22) that it has acquired a majority interest in Rosboro from Wynnchurch Capital. Wynnchurch Capital will remain a significant minority shareholder. Terms of the private purchase were not disclosed. Rosboro is based in Springfield, Oregon and operates captive sawmills and glued laminated timber (glulam) production facilities.
Canfor Corporation announced on Wednesday (12-29-21) that their Houston, B.C. mill, which has been dealing with cutbacks as a result of challenging market conditions since late summer, will resume full operations effective Monday, January 23, 2022. According to Rosemary Silva, Canfor’s External Relations Senior Advisor, “Currently, we have limited staff performing special projects and preparatory maintenance work…”
Russia enacts higher export duties on minimally processed lumber.
China Customs released new phytosanitary rules on importing pine logs and lumber from 7 countries due to pine nematode concerns. The new rules include an updated list of designated Chinese ports pine logs and lumber can be imported starting February 1st, 2022.
The Canadian government, in a statement released on Tuesday (12-21-21) by Canadian Trade Minister Mary Ng, said that Canada has filed an official notice to challenge U.S. duties on Canadian softwood lumber under the US-Mexico-Canada (USMCA) trade agreement. The United States nearly doubled duties on softwood lumber exported from Canada in November.