The world’s largest mass timber airport (nine acres of roof) opened for business in Portland, Oregon. In other Business news: Canada rejects call for binding arbitration on potential rail strike; Canada invests in GHG emission technology; the aftermath of Cochrane, Ontario’s veneer mill fire; and more on the recent US lumber duty increase. Meanwhile, Canadian housing starts jump 16% in July, while US housing starts plunge to a four-year low.
In Forestry/Wildfire news: wildfire smoke is impacting most of Canada; the 2023 fire season released 10 years worth of CO2; Alberta wants to see more aggressive fire mitigation efforts; California has a new wildfire forecasting tool; a Washington judge rejects an anti-forestry lawsuit; ENGOs say logging near Revelstoke threatens BC caribou habitat; and the anti-wood sentiment facing US wood pellet manufacturers.
Finally, is it time for Canadian forest products firms to focus on political risk management? (Part 1 of 2).
Kelly McCloskey, Tree Frog Editor
The US Department of Commerce released its final determinations for the fifth Administrative Review (AR5) in the antidumping duty and countervailing duty investigations of imports of certain softwood lumber products from Canada. The final determination rates are listed in the table below. These rates will take effect once they are published in the U.S. Federal Register, expected within approximately one week.
U.S. officials warned Canada in February that its tariffs on Canadian softwood lumber would increase, but a final decision on Tuesday that nearly doubled them was a body blow to an already challenged industry. The U.S. Department of Commerce announced its decision, which will start being applied to American imports of Canadian lumber almost immediately, to increase the total tariffs to an average rate of 14.54% from 8.05% a year ago. “It’s not welcome at all, particularly for B.C. (which is) faced with a number of challenges,” said Kurt Niquidet, of the B.C. Lumber Trade Council. “We’re a high-cost producer, so this just adds to the cost of shipping to our major market.” …“You might see curtailments as a result, all depending on how markets, more broadly, move over the next little while,” Niquidet said. …The new tariffs add US$58 to the price paid by U.S. buyers compared with $32 under the previous rate.
North American industry groups and shippers are bracing for an unprecedented simultaneous stoppage at both of Canada’s main railway companies that could inflict billions of dollars of economic damage. …Talks between Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) on one hand and the Teamsters union on the other have deadlocked, with each side accusing the other of bad faith. …A stoppage would also hit the United States, given the degree of integration between the two economies. Canada sends around 75 per cent of all goods exports south of the border. The networks of the two Canadian rail operators, CN and CPKC, connect with several key U.S. rail and shipping hubs, such as Chicago, New Orleans, Minneapolis and Memphis. …In anticipation of a potential lockout, it also announced it was embargoing all intermodal traffic originating from over half a dozen U.S. hubs with which its network connects, starting on Friday.
The key data published this past week was national industry output or GDP, which came in above expectations at growth of 0.2 per cent month to month. This points to a better-than-expected annualized growth rate of two per cent for the second quarter of this year. …BC has consistently outperformed the national average both during and before the pandemic period. …Resources remain a critical component of B.C.’s economy and its goods exports. On the forestry front, real Canadian output pointed to a flat performance in May. Forestry and logging output rose by 0.6% and wood manufacturing gained 1.7% from the previous month. Year over year, forestry and logging were down 5.3%, while wood product manufacturing increased by 10% over the last 12 months. Nationally, wood product manufacturing was range-bound through the pandemic despite a recent uptick, while forestry and logging continues to trend lower. Year to date, the former rose by 3.2%, with forestry and logging were down 6.9%.
VANCOUVER, BC — Conifex Timber reported results for the second quarter ended June 30, 2024. EBITDA was negative $7.1 million for the quarter compared to EBITDA of negative $0.5 million in the first quarter of 2024 and negative $8.7 million in the second quarter of 2024. Net loss was $9.7 million for the quarter versus net loss of $4.5 million in the previous quarter and negative $9.2 million for the year-earlier quarter. Shipments of Conifex-produced lumber totaled 38.5 million board feet in the second quarter of 2024, representing a decrease of 13% from the 44.5 million board feet shipped in the previous quarter. …Electricity production contributed revenues of $4.5 million in the second quarter of 2024, $8.2 million in the previous quarter and $4.8 million in the second quarter of 2023.
New residential construction in the U.S. saw a steep drop in the month of July, according to a report released by the Commerce Department on Friday. The report said housing starts plunged by 6.8% to an annual rate of 1.238 million in July after jumping by 1.1% to a revised rate of 1.329 million in June. Economists had expected housing starts to slump by 1.7% to an annual rate of 1.330 million from the 1.353 million originally reported for the previous month. With the sharp pullback, housing starts tumbled to their lowest level since hitting an annual rate of 1.053 million in May 2020. Single-family housing starts led the way lower, plummeting by 14.1% to an annual rate of 851,000 in July after edging down by 0.1% to rate of 991,000 in June. On the other hand, multi-family starts soared by 14.5% to an annual rate of 387,000 in July after surging by 4.6% to a rate of 338,000 in June.
Europe is the world’s largest wood pellet market, producing just slightly more than it consumes. According to Bioenergy Europe’s Statistical Report 2024, released in June, the EU alone produced 20.7 million metric tons in 2023 and consumed 21.9 million MT. That equates to producing 44% and consuming 50% of the world’s pellets. But while production and consumption has steadily climbed in the EU and United Kingdom without interruption for nearly the past decade, last year saw a deviation from that trend. Wood pellet consumption actually declined by a collective 2 million tons from 2022 to 2023, from 32.1 million MT to 30.1 million MT, the culmination of a number of market forces. …Bioenergy Europe highlights the challenges the European pellet industry has faced as being threefold: higher input prices, falling industrial demand and a record warm winter. 
The Coastal First Nations-Great Bear Initiative (CFN) and the Government of BC are renewing their commitment to work together through a reconciliation agreement that builds off the success of their 2009 reconciliation protocol and 2020 Pathway to Reconciliation MOU. …Christine Smith-Martin, CEO of the Coastal First Nations-Great Bear Initiative said, “We have improved land and marine use planning throughout the Great Bear and launching a marine protected area network that sets a new precedent for conservation and sustainable management. We look forward to working together on Reconciliation 2.0.” The Province is contributing $1.6 million annually for implementation funding for four years. …The agreement outlines how coastal First Nations and the Province will work together to increase the quality of life throughout the area. This includes… clean energy, and opportunities in coastal forestry, and reinforces CFN’s conservation efforts in the Great Bear Rainforest.
