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In WOOD MARKETS’ new five-year Softwood Lumber Chapter forecast, U.S. duties on Canadian lumber exports to the U.S. are expected to cause short-term chaos after they are announced in early Q2/2017. This new development alone completely changes all previous outlooks as a new approach to “managed trade” by the U.S. kicks off the 5th U.S.-Canada lumber war. The American position is to try and marginalize its largest competitor (Canada) by using elements of U.S. trade law that will allow the implementation of preliminary and prohibitive export duties.

These details and further analysis of commodity lumber and panels was released today in the report, WOOD MARKETS 2017 – The Solid Wood Products Outlook: 2017 to 2021 by International WOOD MARKETS Group, Vancouver BC.

The expected implementation of countervailing (CVD) and anti-dumping (ADD) duties on Canadian lumber exports to the U.S. will cause lumber prices to surge in 2017 and go even higher at various points over the next five years. The WOOD MARKETS 2017 Outlook has adopted a 25% combined export tax, but the final combined duty determination starting in Q2/2017 could be even higher.

In assessing the impact of export duties on Canadian exports to the U.S., WOOD MARKETS has run the report’s base case model at 25%, as well as three other duty scenarios: no duty (0%), 15% and 35%. These different model scenarios involve a full analysis regarding U.S. and Canadian production, imports, exports and consumption. “However,” indicated Russ Taylor, President, “the major gap in the WOOD MARKETS models is trying to find enough lumber supplies to meet projected U.S. demand around 2020, even at a 0% duty. When duties of 25% and 35% are considered, the question looms as to where the U.S. will get all of its lumber and at what price.”

From International Wood Markets: https://www.woodmarkets.com/u-s-export-duties-canadian-lumber-cause-market-chaos-soaring-prices/