U.S. Delays Ruling on Canada Lumber Duties as Dispute SimmersBy
Move will give U.S. ‘sufficient time” to review information
Countervailing duty still expected end of April: ERA
The U.S. has delayed part of its decision in a long simmering spat over softwood lumber with Canada.
The U.S. Department of Commerce will postpone its deadline for preliminary anti-dumping duties on Canadian softwood lumber to June 23, according to a statement published in the Federal Register. The decision was initially expected by May 4.
The petitioner asked for the deadline to be extended so the agency has “sufficient time to gather and review all the relevant information,” U.S. Department of Commerce spokesman Will Reinert said in an email. The delay sent shares of Seattle-based Weyerhaeuser Co. tumbling as much as 1.8 percent in New York, the biggest intraday drop since March 6.
The softwood lumber dispute was revived in November when U.S. producers filed a petition asking for duties to be imposed on Canadian lumber. The U.S. Lumber Coalition alleges Canadian timber is heavily subsidized and imports are harming mills and workers.
The department’s decision on countervailing duties is still expected to be released next week and the two duties combined -- countervailing and antidumping -- will probably be big enough to hurt Canadian producers, said Kevin Mason, managing director of ERA Forest Products Research.
“The number’s going to be high enough to hurt and really drive the Canadians to the negotiating table,” Mason said in a telephone interview from New York. “If the duties are higher than expected, that’s going to push lumber prices higher than expected.”
Weyerhaeuser ended Wednesday’s trading down 0.8 percent to $34.49. Lumber futures in Chicago climbed as much as 1.8 percent.
Antidumping duties will probably be from 10 percent to 15 percent, while countervailing duties will be 20 percent to 30 percent, RBC Capital Markets analyst Paul Quinn said in an April 17 note.
The U.S. doesn’t have enough domestic softwood lumber to meet its own housing demand, and higher prices stemming from duties will be passed on to consumers, ERA’s Mason said.
The trade spat has contributed to a more than 20 percent surge in wood prices since the U.S. election and penalties could increase the cost even more. Lumber futures have jumped about 18 percent this year, the most among 34 commodities tracked by Bloomberg.
“It’s the U.S. consumers that really take it on the chin here,” Mason said. “Consumers have no voice.”