In the News
Commerce Department Cuts Lumber Duties
On June 3, the U.S. Depart-ment of Commerce (DOC) decided to cut duties on imported Canadian softwood lumber in half by year-end.
The DOC announced the preliminary administrative reviews of the countervailing and antidumping cash deposit rates for all Canadian softwood lumber exports to the United States. The administrative reviews are based on softwood lumber shipments to the U.S. between May 22, 2002 and April 30, 2003. Final determinations for these administrative reviews will be made by December 7, 2004.
The DOC assessed a preliminary country-wide countervailing rate of 9.24 percent and an “all other’s” antidumping rate of 3.98 percent. This is a significant drop from the current countervailing cash deposit rate of 18.79 percent and the current antidumping cash deposit rate of 8.43 percent. The combined preliminary administrative review rate of 13.22 percent is less than half the current rate of 27.22 percent.
“We are pleased to see that the rates have been cut by more than half,” said John Allan, president of the BC Lumber Trade Council. “We are confident that the DOC will not be able to fairly find any subsidy in the final determinations. Canada’s vindication continues.”
“We have always maintained that Canadian softwood lumber is not subsidized and not dumped in the U.S.,” added Allan. “This trade dispute will not end until all duties are removed from Canadian softwood lumber exports.”
The preliminary countervailing and antidumping administrative review cash deposit rates will come into effect after the final determination in December 2004 and will be the rates going forward.
The National Association of Home Builders also feels cutting the duties in half is a step in the right direction, but urged the U.S. government to act quickly to totally eliminate the tariffs before they take a further toll on the affordability of new housing.
“The DOC ruling to halve punitive duties on Canadian lumber shipments from 27.2 percent to 13.2 percent shows that even the U.S. government is finding it increasingly difficult to justify complaints from domestic producers that Canadian lumber is subsidized,” said Bobby Rayburn, president of the Washington, D.C.-based National Association of Home Builders (NAHB) and a home and apartment builder from Jackson, Miss.
On June 7, the North American Free Trade Agreement (NAFTA) panel determined for a second time that the domestic lumber industry’s allegations that Canadian trade practices threaten U.S. producers are baseless and contrary to law. Under U.S. law, if the decision is upheld, the administration must eliminate the duties altogether.
The U.S. International Trade Commission (ITC) had until June 10 to respond to the NAFTA panel, and their decision was not in Canada’s favor.
The ITC for the second time submitted a revised decision to support a ruling that originally said the U.S. lumber industry faced a “threat of injury” from the lumber imports.
After accepting complaints from U.S. lumber producers that they could be harmed by Canadian lumber imports, the DOC in May of 2002 imposed countervailing and anti-dumping duties averaging 27 percent on Canadian softwood lumber shipments into the U.S.
(See related article in September 2003 SHELTER on page 16.)
Prices for Finger Joint Mouldings Still Growing
Finger joint mouldings have seen a particularly strong year thus far, with the price of imported finger joint mouldings averaging about $1550, up from the October 2003 low market level of about $700.
According to the Association of Millwork Distributors’ (AMD) June newsletter, a combination of factors has been responsible for this increase, beginning with foreign producers operating at losses.
Late in 2003, Brazilian producers put out word that they were reducing their production and raising prices. The resulting competition for available mouldings pushed prices even higher and had distributors placing orders for the critical months of April, May and June months in advance.
Late shipments, caused by shipping reductions, increased competition for vessel space and a dockworkers’ strike in Brazil caused an even bigger drop in the volume of available mouldings. Processing and shipping of the backlog of orders at the docks in Brazil is predicted to occupy the rest of the year.
By the middle of May, domestic finger joint mouldings were averaging about $2100, while imported finger joint mouldings were selling for $1550 to $1600 at the dock and, according to the AMD Newsletter, are still on an upward trend.
MERGERS AND ACQUISITIONS
Canadian Lumber Firms Increased Production in 2003
Reuters recently reported that Canada’s lumber firms produced more in 2003, despite trade issues with the United States. The article went on to say that only the larger lumber firms were responsible for the gain.
“Canada’s 30 largest lumber firms produced 24.3 billion board feet of lumber in 2003, up from 23.4 billion in 2002,” according to the annual survey by the lumber industry consulting firm R.E. Taylor & Associates.
“The country’s 10 largest firms produced 900 million more board feet in 2002, while production from smaller firms dropped about 50 million feet,” stated the article.
Van Custom Millwork Featured At JLB Show House
The Commandant’s House at the Charlestown Navy Yard was chosen as the 2004 Junior League of Boston Decorator’s Show house, which features the library redesigned by Bellingham, Mass.-based Van Custom Millwork.
The Commandant’s House was built in 1805, creating a challenge in that the room’s existing historical woodwork could not be changed in any way. Van Custom incorporated the historical casings around doors and windows into the overall design, then added such features as crafted maple paneling, built-in cabinetry and a mantel that was constructed to slip over the original mantel in the room in order to preserve the historical architectural detail.
The panelization and cabinetry both used flat panel construction with a bolection moulding detail. A three-step process of a stain, toner and top-coat completed the changes made to the room.
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