What was the big news?..The Kitwanga saw mill was re-opening after being idled for several years...
In typical Christy Clark fashion she boasted and bragged.....Check out the BC Liberal video of the event here, make sure you watch the part where Christy and pledge pin Bell are making flapjacks for the workers..
Well guess what, the mill has closed again because they can`t get any fiber and lumber prices have crashed(I wonder why), but the funny part is there is truckload after truckload of raw logs heading for China driving right past the mill, imagine that!
The Kitwanga sawmill in northwestern British Columbia just opened in June, but due to a swift decline in lumber demand, the mill is already taking downtime.
“We started the mill in the early summer period. All the experts leading up to that period in time were predicting stronger market outlooks,” Pacific Bioenergy president Wayne Young said. “It’s unfortunate things have softened since.”
Lumber prices have fallen this year, and Chinese demand is dropping due to an inventory build up in China.
Industry analyst Paul Quinn of RBC Capital Markets said China is known for buying and building inventory when the prices are low, then climb out of the market while prices climb.
Quinn believes we will see more short-term mill closures, but he expects this is a short-term issue.
Kitwanga Lumber applies for bankruptcy protectionDecember 8th, 2011 | Posted in Financial News | No comments » Kitwanga Lumber Co. Ltd. has applied for bankruptcy protection.
Kitwanga Lumber is a subsidiary of Pacific BioEnergy Corporation. Pacific BioEnergy purchased the Kitwanga sawmill in northwestern British Columbia out of receivership in the fall of 2009.
The Kitwanga sawmill had just reopened in June, but the markets softened and the sawmill closed temporarily in October. The company has said it was unsuccessful in their attempts to seek new nice markets for their specialty wood products mill, and the outlook for 2012 is not expected to improve.
Read more here
Let me say this, I don`t blame the pretend premier for the mill closing but I am sick n tired of the photo-op queen wasting $millions flying PAB and her media stooges around the Province trying to score political points.
I would like to point out something that industry experts know and what they explicitly stated above...
"China is known for buying and building inventory when the prices are low, then climb out of the market while prices climb."
If anyone thinks China will be BC`s saviour is fooling themselves, China is on the verge of a domestic housing bubble crash, their exports are falling faster than Christy Clark`s face lift.....And the news gets worse, Natural gas prices have tanked, current prices are barely over $3 dollars per unit and that means the province of BC will be short a fortune, their budget numbers were based on $4 dollar to $6 dollar per unit on natural gas...Expect at least another $400 million added to this years budget deficit before the year is out.
But here`s the deal, British Columbia saturated the lumber market by dumping billions of raw logs into the market, by being greedy environmental sell outs they crashed the market and indirectly have led to the closure of dozens of BC mills, don`t BC Liberals understand supply and demand?....
The BC Liberals are so damn stupid with their corporate ideology, look at the natural gas price slide, here is a detailed chart....
Christy Clark doesn`t understand anything about business and even less about the Chinese...We have a finite amount of natural gas and presently there is a world glut of natural gas, Christy wants 5 LNG plants opened up, the Australians are way ahead of us and the USA is going fracking crazy too, the present price and royalty rates has BC making nothing on the gas, nothing, add 5 new massive LNG plants everywhere and the price will remain flat or worse and the Chinese will have us right where they want us, begging for crumbs!
Like I wrote about before, slow and steady wins the race and if we were smart, we would go real slow and build but 1 LNG plant and let other countries exhaust their supplies, keep the price up, british Columbia would be better of with 1 LNG plant making profits and providing decent royalties to the province than 5 plants driving down the price while ravaging the province...
Time to think long term, time to think like the Chinese!
The Straight Goods
Cheers Eyes Wide Open