Canfor Corporation says it paid $51.7 million in countervailing duties in the second quarter, the result of U.S. tariffs that went into force in 2017.

Canfor, which sells more than half of its lumber to the U.S., reported operating income of $282.1 million for the second quarter of 2018, up $78.3 million from the first quarter, with the increase reflecting significantly higher lumber segment operating earnings as well as growing pulp sales.

Canfor, which also makes glulam engineered wood beams and columns, says it paid a net duty expense of $51.7 million, at a current effective countervailing duty and anti-dumping duty rate of 14.94%, compared to $34.9 million in the first quarter of 2018 and $35.6 million in the second quarter of 2017. After adjusting for duties, operating income was $333.8 million for the second quarter of 2018, up $95.1 million from similarly adjusted operating income in the first quarter of 2018.

Adjusted lumber segment earnings largely reflected record Western Spruce-Pine-Fir and Southern Yellow Pine benchmark lumber prices, a 2 cent, or 2% weaker Canadian dollar and increased shipment and production volumes following the significant weather-related transportation and operational challenges experienced in the first quarter of 2018.

Canfor plans to build a $120 million, state-of-the-art softwood lumber sawmill in Washington, Georgia, with a production capacity of 275 million board feet and produce high-value dimension and specialty lumber products. Startup is scheduled for third quarter of 2019.

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