No certainty seen on renewal of US-Canada Softwood Lumber Agreement

VANCOUVER (Scrap Monster): The Softwood Lumber Agreement (SLA) between Canada and the US is due to expire on Oct 12^th. There seems to be no certainty on either side with regards to renewal of the contract. The governments of both countries are seen more interested on Trans-Pacific Partnership (TPP) agreement. According to sources, the US Lumber Coalition has raised serious indifferences to renewal of the agreement in its current format.

The market share of Canadian lumber in the US market has dropped considerably from 34% in 2006 to 28.8% in 2014. The market share is expected to drop further to 25% by 2027. Meantime, Canadian lumber export market has diversified to new markets in emerging Asian countries. The softwood lumber exports to China has increased multi-fold when compared with 2005.

The pine beetle infestation has impacted the timber supply from B.C region. Consequently, many Canadian lumber firms have been in a process to expand their mill presence in the US. However, despite surge in exports to Asian region, the US still remains to be the major consuming market of B.C softwood. Industry sources indicate that the US will continue to remain as the key export destination for Canadian mills as no other country can export lumber to US so easily and cheaply as Canada.

According to reports, Canada’s Ministry of International Trade has expressed its support towards renewal of the agreement with the same terms. However, BC Lumber Trade Council pointed out that no talks have happened so far between the two countries in extending the existing agreement.