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

Hundreds of B.C. firefighters ‘climb the wall’ for BC Lung Association

The charity fundraiser saw participants climbing up 48 storeys

Leap year babies from 1964: Where are they now?

Two kids featured in March 1st edition of Juan de Fuca News Review

Former Belmont principal turns 15 in leap years

Ray Miller among the 0.07% of the population to have Feb. 29 as a birthday

A fare fight: Passenger arrested after refusing to pay Victoria cab driver

Woman taken into police custody after arguing with cab driver

Teachers wear red Friday for National Day of Public Education

The day ends with a rally at Minister of Education’s office

Stories of sexual assault at B.C. tree planting camps ‘shocking but not surprising:’ advocate

Contractors’ association is working with trainers to create respectful culture

Lawyer gets house arrest for possessing child porn

Maple Ridge resident gets nine-month term

Notorious B.C. fugitive to be extradited from California on murder charge

Brandon Nathan Teixeira submitted to extradition during court proceedings Thursday in Sacramento

Canada prepared to monitor for community spread of COVID-19: Tam

The U.S. confirmed one case of the new coronavirus, or COVID-19, in California Thursday

Decade-long health care battle draws to a close today in B.C.

Dr. Brian Day began his battle a decade ago against the B.C. government

Conservative MP questions whether rail blockades constitute terrorism

Crown-Indigenous Relations Minister Carolyn Bennett travelled to B.C. to meet Indigenous leaders

‘The project is proceeding’: Horgan resolute in support of northern B.C. pipeline

B.C. premier speaks as talks scheduled with Wet’suwet’en hereditary chiefs

Most Read