Do you think us housing starts will recover this summer (2011)?

View Results

Loading ... Loading ...


Do modern timber harvest practices take environmental concerns seriously enough?

View Results

Loading ... Loading ...


Does increased paper production in emerging nations like china and india mean the end of the north american and european paper industry?

View Results

Loading ... Loading ...


Will china's growing hunger for timber cause a threat to global supply from new zealand's forestland?

View Results

Loading ... Loading ...


Will russia eventually develop a thriving sawmill industry?

View Results

Loading ... Loading ...

CCA Treated Wood in Canada Lumber Prices

Volume 52 No. 6, February 8, 2002

The Bad Boys List

Whether it’s a wooden deck, a picnic table, fence posts, or utility poles, chances are the wood is pressure treated with chromated copper arsenate or CCA, and right now CCA is on the bad boys list. CCA is applied to wood to prevent rot and insect damage. The problem is that CCA contains arsenic, a known carcinogen that can leach out of the wood into the ground. While some argue it poses a risk to humans who come in contact with it, others aren’t so sure. Pentachlorophenol (penta) is also on the bad boys list because of its dioxin content.

The CCA issue is currently raging in theU.S., where the treated wood industry represents a $4 billion a year business. There is every reason to believe, however, that if CCA is banned in theU.S., it will also be banned inCanada, although the impact would be less significant here, since the volume of treated wood products exported to theU.S. fromCanada is small. Should the U.S. ban CCA, one of the species likely impacted would be southern yellow pine, and that would probably make life even more difficult for Canadian lumber producers.

There are currently no standards for arsenic levels in wood. In the past, both the EPA and the Consumer Products Safety Commission have found CCA treated wood to be safe, although both are currently reviewing this stance, especially in relation to children. TheU.S.senate is demanding the EPA provide it with a report on the dangers of CCA treated wood by February 15.

The CCA issue has been bubbling away for some time, but really started gathering momentum last November, when twoU.S.environmental groups, the Environmental Working Group and the Healthy Building Network, released a study on it. To conduct their study, members of the organizations went to 18 Home Depot and Lowe’s stores in 13 locations and swabbed pressure treated lumber with moist polyester wipes. The wipes were sent to a government certified lab for analysis and the results indicated arsenic levels exceeded allowable levels for drinking water. I’m not sure about the connection to drinking water, but it didn’t seem to matter.

With the results in hand, the two groups concluded that one in 500 children who play on arsenic treated playground equipment and decks around their home can be expected to develop lung cancer or bladder cancer later in life. Admittedly, the scientific method was wanting and the extrapolation questionable, but that was of little consequence to parents who saw pressure treated lumber as a threat to the long term health of their children.

The problem hasn’t reached the same proportions in Canada, but Canadian CCA treaters are watching what is going on in the U.S. Between 1987 and 1990, Health Canada did a study on CCA wood treatment and the impact arsenic-laden pressure treated wood could have on children. The report concluded that the arsenic in CCA did indeed pose a threat and that children should be kept away from it, but HealthCanadadid nothing.

With 66 CCA treating plants, the Canadian pressure treating industry is a $700 million a year business employing 1,800 workers.Ontariois the largest Canadian producer with 18 treatment plants, while B.C. is second with 16 facilities. About 70 per cent of the operations belong to theInstituteofTreated Wood, the Canadian wood treatment association. A ban on CCA in theU.S.isn’t likely to have much impact on the Canadian treating industry, sinceCanadaexports little CCA treated product there.

It’s not that there aren’t alternatives to CCA. The Americans have a product called ACQ, alkaline copper quaternary, and there is also CBA, copper borate azole. In all likelihood, it’s just a matter of time before CCA pressure treated wood is outlawed in theU.S., andCanadais certain to follow.

In response, producers of alternative products are rallying to the cause. The U.S. Plastic Lumber Corp., for instance, which makes components from recycled plastic, says phasing out CCA pressure treated lumber provides an enormous opportunity. USPL says its products are a safe alternative to pressure treated lumber and plastic has no insect or rotting problems. The company currently has three plastic manufacturing and recycling facilities in theU.S.

Hot on the heels of the plastics industry is the B.C. red cedar industry. Hurt by American tariffs on Canadian lumber, the red cedar industry says its products are a natural alternative to pressure treated wood because red cedar contains a natural preservative and is safe to use in any application. This group also sees a potentially expanding market in theU.S.should CCA treated wood be banned. Unfortunately, B.C. red cedar is currently subject toU.S.tariffs, which could impact negatively on any potential market gains.

The possible ban on CCA treated products doesn’t come as a surprise to most in the industry. Support for such a ban has been increasing for some time now and countries such asJapanstopped accepting CCA treated wood several years ago.

But while CCA treated wood may be prohibited for use in some applications, it may not be banned entirely. CCA pressure treatment may still be allowed for some industrial applications such as wharves and utility poles. Approximately half of all utility poles are currently treated with CCA. In these applications, human contact is less likely and since CCA is one of the best and most cost effective preservatives, the incentive to continue using it is strong.

Highs in Housing

The Canadian Real Estate Association reports that both the number of sales and average selling price set new record highs last year, as Canadian housing activity defied the predicted economic downturn. Average selling price hit an all time high of $171,910, with total transactions zooming up to over $65 billion. The activity wasn’t confined to any specific geographic area, but was experienced generally across the country. Sales in the last month alone jumped 14 per cent, or over $6.8 billion, producing the best December on record. Except forManitobaandPrince Edward Island, every province inCanadaset a new December record.

Low mortgage rates and high consumer confidence are being credited for initiating the higher than expected results. The prime rate at many banks is as low as 3.75 per cent, pulling down variable rate mortgages to a 40 year low. With a bit of shopping around, prospective buyers can find five year closed mortgage rates as low as 6.85 per cent.

Sales for 2001 were reported at 380,458 units, an all-time record, compared to the previous record of 335,822 set in 1999. Largest yearly increase in unit sales was inBritish Columbia, where sales jumped 28 per cent over 2000. At $222,984, B.C. also had the highest average house price.

Predictions are for continuing low interest rates this spring, with housing activity continuing at a strong pace. First time buyers are expected to keep on fueling the Canadian housing boom.

Elk Falls Down?

TimberWest Forest Corp. says it may close its Elk Falls sawmill on Vancouver Island unless it can gain more access to theU.S.lumber market and cut labor costs. The company says the plant, which employs approximately 200 workers in the community ofCampbell River, is no longer earning an economic return on capital employed. One of the last large log mills on the B.C. coast,ElkFallsrequires extensive modernization to change from processing large logs to processing second growth logs.

Spokesman for the Communications, Energy and Paperworkers Union Dave Schaub says his organization has a good rapport with the company and is willing to talk about the problem. He says the members realize if the plant is upgraded there will be fewer jobs. He states, however, that if the company attempts to shut down the plant while continuing its export of raw logs to theU.S.there’s going to be a reaction on theIsland. Earlier in the year, TimberWest closed its Youbou sawmill under similar conditions. Youbou was closed despite a provincial requirement that ties Crown timber to a specific processing plant in the area. The B.C. government is currently considering dissolving this tie.

With 344,000 hectares under its management, TimberWest is the largest private landowner in the province. The company has just turned in one of the strongest performances on the B.C. coast for the fourth quarter of last year, due mainly to its log exports. Since 1998, TimberWest has tripled export volumes. Export permits for logs from private land are easier to obtain than for logs from Crown land. The company says it hopes to expand the log export side of its business and be more involved in real estate sales. TimberWest wants to produce wood products only when it can achieve a return on capital employed.

De Jong Sounds Off

Mike de Jong, B.C. forests minister, says the softwood lumber dispute is threatening relations betweenCanadaand theU.S.In a reference to 9-11, de Jong says the Americans have takenCanadafor granted in several ways. “We have some expectations and those expectations don’t include being jerked around in the way that we have on an issue that is of such fundamental importance to us,” de Jong states. He says he will meet with federal international trade minister Pierre Pettigrew and other provincial counterparts to discuss alternatives to a negotiated settlement.

The Americans maintain there is no lack of understanding in what they want. They sayCanadais refusing to deal with theU.S.industry’s requirement of a fully open and competitive timber market or something that accurately mirrors a competitive market.

WSPF Working It Out

The western spruce market gradually worked down to lower prices. As mills responded reluctantly to pressure applied by wholesalers, customers’ counteroffers of $2-$4 were taken more seriously. Early February is usually a flat spot in the market, and this week tracked with history. No end to the sideways grind was in sight, according to traders.

Prices of KD R/L Std&Btr 2×4 stood firm at $245. In KD R/L #2&Btr, 2×4 lost $12 to $250; 2×6 held at $240; 2×8 erased $10 to $230; 2×10 was cemented in place at $260; and 2×12 was the only gainer with a $10 increase to $350.

Studs Short

Stud producers sold little of their bread and butter products, but odds and ends went well by comparison. Prices of premium studs were relatively flat compared to those of the previous week. Order files remained at the week of February 18, having added few orders. Truck transportation toAlbertaand eastern locations was problematic as over-the-road equipment was hard to source.

ESPF Fast and Firm

The eastern spruce market was fast and firm all week. New orders came in steadily and prices held at levels established in the previous week. Order files remained in the range of two weeks.

MSR Stabilizing

Decent business kept MSR producers at their desks, but not sweating. Prices stabilized as supply balanced with demand. Business was best in the four-inch dimension. Order files stayed at two weeks.

Cedar Gripping

Business was gripping, not griping, in cedar. Customers came in for a round of buying to pick off everything that was available on the ground at the mills. A spate of forward orders that extended deliveries well into the second quarter kept traders hopping. Prices on radius edge decking felt upward pressure from scarcity. However, published price lists remained firm at established levels.

Weyerhaeuser re-configured production at the mills that are picking up the lines dropped by the closure of Canadian White Pine.

KD Fir Lethargic

Blustery weather across the country took the bloom off the cheeks of fir traders. What had been an early spring market fizzled. Buying dropped off to a hit-and-miss proposition. Prices trended downward by $5-$10 across the board.

OSB & Plywood

Central Canadawas not asked to endure snow, sleet and frozen rain as was the situation a week ago. The return to plain old cold weather did not inspire improved activity in the panel market. Slower paced construction gave producers a chance to catch up on deliveries. Distributors have enough stock to get them through the next two weeks and have reduced their panel purchases. Prices are flat this week with 7/16”Torontounchanged at C$261. Mill order files are nearly through the week of February 18, and unless order files begin shrinking, mills are expected to try and hold prices.

In westernCanada, it was another quiet week. There was a lot of tire kicking, but not much buying.WashingtonStatebuyers expressed some interest, but demand from other westernU.S.states was muted. 7/16”Vancouverattracted interest this week at $230, down $10 from a week ago. Order files are through the week of February 18 and are well into the week of February 25 at some mills.

Cargo & Reload

The weather is cold and wet in theU.S.northeast. Lumber buyers took a quick look at the calendar, noticed it was the middle of winter, and put their order books back in the desk drawer. During our market survey, stocking wholesalers’ biggest challenge was trying to think of different ways to say it was a slow week. All agreed the competition was intense, as they fought to squeeze some business from customers who had decided they had enough stock and didn’t need much lumber right now. A wide range of green fir selling prices was offered, but customers refused to respond and weekly sales totals declined.

Fir mills in theU.S.west found their order files had all but disappeared and adjusted asking prices.Californiashowed enough interest in green fir narrows to encourage mills to raise 2×4 green fir delivered prices by $5, but most business with northeastern buyers was done on counters and was small in volume.

Refer to Madison’s Lumber Reporter for the latest news in the lumber industry.


Related Articles:

To vote on this article click on the below bar (make sure to choose vote before clicking):
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...

You must be logged in to post a comment.