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

COLUMN | Waste carts

Columnist Andre Carrel talks about garbage collection in Terrace

Officials for Mills Memorial Hospital replacement project named

Project is estimated to cost $450 million

Letter to the editor: I stand with them

Hazelton resident shares his perspective on why he supports the Wet’suwet’en

Terrace cab stolen, found destroyed along Hwy 16 riverbank at rest stop

Driver was sent to Prince Rupert hospital after stealing the running vehicle from company lot

Wet’suwet’en hereditary chiefs call for end of police patrols

Temporary closure of field office not enough to meet demands

VIDEO: Wet’suwet’en supporters vow to keep protesting at B.C. legislature

Supporters say they will continue ongoing action to hold government accountable

VIDEO: Province promotes ‘lifting each other up’ on 13th annual Pink Shirt Day

Students, MLAs, community members gathered at B.C. Parliament Buildings Wednesday

Prepare for new coronavirus like an emergency, health minister advises

About 81,000 people around the world have now become ill with COVID-19

B.C. residents in Wet’suwet’en territory have right to police presence: Public Safety Minister

Nevertheless, Bill Blair said officials remain ‘very anxious’ for the barricades to come down

Winnipeg police investigating graffiti on RCMP and other buildings

Manitoba Justice Minister Cliff Cullen denounced the vandalism

B.C. seniors’ watchdog calls for better oversight after recent problems at Retirement Concepts care homes

‘There is no financial incentive right now to be a good operator’ - Isobel Mackenzie

Trucking company fined $175K for Kootenay creek fuel spill

Decision handed down last Friday in Nelson court

B.C. city rebrands with new logo, cheeky slogan

‘Langford, where it all happens’ is the City’s new slogan

B.C. Liberals call for ban on foreign funds to pipeline protesters

Sierra Club, Wilderness Committee back Coastal GasLink blockades

Most Read