Speculation of a potential resolution on the softwood lumber dispute saw shares of Canadian pulp and paper companie…
Speculation of a potential resolution on the softwood lumber dispute saw shares of Canadian pulp and paper companies shoot upwards on March 30.
According to a report by Canada.com, news that Prime Minister Stephen Harper and U.S. President George Bush are making positive headway on the issue translated to a 15 cent gain for Tembec, whose shares closed to $2 on the Toronto Stock Exchange, a gain of 8%. Domtar gained a full 25 cents, to close at $8.15, a 3.2% increase.
The report indicated that western producers, who are for the most part in a stronger financial position that their eastern counterparts, are more inclined to push for a deal, even if it involves some compromise.
“The big western producers like Canfor want to have a permanent settlement. I’m reading that to say that they’d probably be willing to negotiate more leniently than the eastern producers like Tembec and Domtar,” Canada.com reported John Duncanson, a forest products analyst with Jennings Capital as saying. “Tembec and Domtar want all of the duties back, while Canfor and West Fraser are willing to negotiate and leave some money on the table, but only if it brings permanent peace.”
The past four years have seen Canadian companies dole out a total of $5 billion in duties.
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