US Mill Operator Jumping For Joy Over Value Of Canadian Dollar

Tuesday, November 06, 2007 04:02 AM

Forest industry analysts say they are flabbergasted that some lumber mills are still operating given the value of the Canadian dollar, the poor US housing market and an oversupply of beetle killed wood.

One operator says the downtime is starting, but companies aren't making it public "For example Apollo Forest products in Ft St James is down to four days a week, Winton Global has cut production and other mills are taking extra long breaks at Christmas, they are just not talking about it."

Meantime Pope and Talbot are scheduled to bring three mills back into production. Their mills in Midway, Castlegar and Ft St James are heading back into production which means that more production will surface in the coming weeks.

Duncan Davies, CEO of Interfor, has been saying that they would like to look at some investments in BC’s southern mills and Pope and Talbot’s southern operations

would be ideal pickings

Meantime mills in the US have added shifts as the dollar continues to climb. One mill operator said, “I’ve been jumping for joy over the value of the Canadian dollar, I hope it goes higher”.

Canadian wholesale lumber buyers have moved south of the border to buy wood in Washington and Oregon which could then be shipped north into BC. They say the dollar price difference is sufficient to make the buy economical.

As of Monday no new announcements have been made with respect to shut downs in the north as the dollar stood at around $1.05 against its US counterpart.

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Posted on Tuesday, November 06, 2007 04:02 AM in News by 250 News

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Comments

Posted by: giterdun on November 6 2007 8:04 AM

OUR MILLS CLOSE AND WE BUY LUMBER FROM THE US.......GREAT SYSTEM WE'VE GOT.

Posted by: owl on November 6 2007 8:30 AM

We buy products from wherever they are the cheapest. Why are we so upset about lumber? Just because it is from here?

These days we can watch products from Asia that are being shipped to the east go through PG. Why are we not producing them in Canada? Because they are cheaper to produce in Asia.

Wood is a commodity like any other manufactured product.

Interestingly the Asian products should be starting to become more expensive to those using US currency for daily transactions.

So, it is not only the manufacturers of lumber in the US who should be jumping up and down for joy. It should also be those who have other manufacturing businesses in the USA whose products may all of the sudden be becoming more competitive.

It will eventually settle out, as everything does. The question is when and at what level?

Posted by: diplomat on November 6 2007 10:28 AM

I don't remember our forest industry *jumping for joy* when our dollar was 62cents US.

Our industry was too busy fighting off endless lawsuits filed by the US lumber lobby!

Finally we caved in and gave them a couple of billion dollars to shut up. Oh, I read recently that they are already back at it again.

Can we start suing them now? Looks like it's our turn!

Posted by: Palopu on November 6 2007 11:50 AM

Diplomat; Our forest industry has been jumping with joy for many, many, years and have made billions in profits when the Canadian dollar was lower.

The chickens have come home to roost, and it will be some time before the **good times** roll again.

Dont for one minute think that American Lumber producers dont have some legitimate beefs, because they do.

Posted by: jonnypg on November 6 2007 12:21 PM

Yes Diplomat,you have good point there!

Posted by: diplomat on November 6 2007 12:34 PM

Ok, Pal, we were jumping for joy while fighting off the WTO, NAFTA, GATT, etc.

Free trade? What a joke. They sued us into submission.

We have legitimate beefs, they have legitimate beefs...good thing our forest industry made money (profits) because that is what business is all about! No profit - no business.

I would expect that by now ALL tariffs have been removed, because the Yanks have the advantage now?

Don't tell me...I know the answer.

Posted by: owl on November 6 2007 1:41 PM

"Canadian wholesale lumber buyers have moved south of the border to buy wood in Washington and Oregon which could then be shipped north into BC."

What tariffs are in place for that?

Posted by: owl on November 6 2007 1:51 PM

"Dont for one minute think that American Lumber producers dont have some legitimate beefs, because they do."

All of the USA has a legitimate beef. Their labour and other costs are way too high against the remainder of the world. They have been trying to get China to increase the value of their currency, which has not worked.

So, the world is no longer supporting the US dollar to the degree they have been, which means access to raw materials, goods and services from other countries will become more expensive for them. Thus, theoretically they should be able to increase their manufacturing jobs in the near future.

If that is true, it will be interesting to see where the next state of equilibrium will settle down at and when.

Posted by: owl on November 6 2007 1:52 PM

Wonder how the call centres that depend on US clients are doing?

Posted by: Chadermando on November 6 2007 1:56 PM

Owl you are wrong on the Asian exchange.

The Chinese currency is pegged to the American currency. So as the American dollar falls in relation to the Canadian dollar ditto for China.

Posted by: owl on November 6 2007 3:57 PM

I know that the currency has been pegged to the US dollar, Chadermando.

What I said was: "They have been trying to get China to increase the value of their currency, which has not worked."

http://www.petersoninstitute.org/publications/papers/paper.cfm?ResearchID=611

Posted by: acrider54 on November 7 2007 6:00 AM

California still owes us millions for Hydro supplied. Where's Campbell on that one. Too busy wining and dining The terminator instead.

Posted by: pulpworker on November 7 2007 12:39 PM

Good thing the new lumber agreement brought stability to the industry as david emerson said it would. As the price of lumber drops the tariif increases. Despite a leaked document in washington stating"this is the deal we need to bring the canadian industry to it's knees" the feds pushed ahead with it. Harper & co. told the industry sign on or face a 15% tax. Here's to stability!