U.S. Home Builders To See Impact Of Canadian Wildfires

July 20, 2017 02:42 PM

More than 375 fires have swept across British Columbia, forcing sawmills in the heavily-wooded province to shut down or evacuate.

Approximately 30,000 residents have been forced to leave their homes after 1,900 square miles have been scorched. The entire city of Williams Lake, six hours northeast of Vancouver, was evacuated over the weekend. The community has roughly 10,000 residents.

Ralph Goodale, federal public safety minister, says the fires will get worse before they improve.

“You will see the numbers of individual fires going down, but that does not mean the problem is getting better,” he said. “It means the smaller fires are merging into larger fires and becoming more intense.”

These wildfires are threatening timber supplies, and prices have surged.

Lumber futures reached two-month highs Monday on the Chicago Mercantile Exchange. According to Bloomberg News, lumber futures for September delivery rose by the $10 trading limit to roughly $382 per 1,000 board feet—the highest price for a most-active contract since May 9.

Home builders in the U.S. could start to feel the heat because the U.S. is Canada’s biggest import market for softwood lumber. Analysts say since this is the seasonal peak of construction, a reduction in wood supply will create pricing tension.

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