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The dispute has increased material costs for house builders in the U.S. by 20 per cent, according to Howard. Lumber futures traded in Chicago have gained 11 per cent this year, among the best performance of all the commodities tracked by Bloomberg. Prices fell 0.6 per cent to US$364 per 1,000 board feet Monday morning on the Chicago Mercantile Exchange.

The trade in softwood lumber between the U.S. and Canada has been an intermittent source of friction for years, but tensions escalated in April when the Trump administration set countervailing duties of up to 24 per cent on Canadian imports. Additional duties of as much as 7.7 per cent followed in June.

There’s been speculation since then that both sides could resolve their differences before talks this month aimed at renegotiating the North American Free Trade Agreement. But so far, it’s remained as speculation.

House Building

Monthly softwood lumber shipments from Russia totaled 4,214 cubic meters in May, the most since January 2008, data from the U.S. Department of Agriculture show.

For the first half of the year, offshore softwood-lumber imports into the U.S. rose 38 per cent, while shipments from Canada declined 1 per cent, said Bloomberg Intelligence analyst Joshua Zaret.

The additional cost of Canadian lumber is not only saddling U.S. consumers with extra costs but threatens to price some of them out of the market, according to Howard. For every US$1,000 price increase of a home, 150,000 people are priced out of the market, he said.

“Fewer houses are being built at the moderate price points, and they’re not being built because the cost of lumber puts them out of too much of the consumers’ buying range,” he said.

Bloomberg