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Fires boost lumber prices

Wildfires in the B.C. Interior that have forced some sawmills to halt operations have resulted in a boost in lumber prices at a time when forestry companies have been squeezed by softwood duties on exports to the U.S.

By Wednesday, the benchmark price of Western spruce-pine-fir lumber had risen by 5.5 per cent to US$400 per thousand board feet from US$379 last Friday, according to figures from Random Lengths, which tracks lumber and panel prices.

"It's a big jump," said Shawn Church, Random Lengths editor.

Ketan Mamtora, an analyst with BMO Capital Markets, said he expects prices will rise between six and eight per cent over the next couple of weeks, partly due to a limited supply.

It's possible for the industry to increase capacity at other facilities, but Mamtora said it's unlikely they can make up for all lost production. Fear over possible lumber shortages also "really pushes up the prices," he said.

If the fires persist for a long time, that will have "a much more meaningful impact on pricing," Mamtora added.

In the case of mills staying shut for months or even sustaining damage, he estimates prices could rise between 15 and 17 per cent.



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