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Canadian export markets are rapidly shrinking

The most recent affect of the shrinking timber market in Canada is that the last of the major Canadian lumber giants, Western Forest Products, has slowed its production and announced temporary curtailments at three of its British Columbia (BC) sawmills. Source: Timberbiz

Demand is down and so its Duke Point sawmill will have two weeks of downtime, its Saltair mill will have one week, and it will also reduce operational hours at its Chemainus mill.

“The temporary production curtailments are necessary due to challenging market conditions,” Don Demens, Western’s President and CEO said.

“The challenge of weak markets is compounded by the disproportionate impacts of softwood lumber duties on high value products, including Western Red Cedar.”

The curtailment is expected to reduce production by approximately 15 million board feet. Western has an annual lumber capacity in excess of 1.1 billion board feet.

Already other companies such as West Fraser, Canfor and Conifex have restricted lumber production due to poor lumber markets, high log costs, log supply issues and falling prices as well as the US import tariffs.

Canfor has reduced operations at all its BC sawmills except its WynnWood operation.

The majority of mills will be curtailed for two weeks or the equivalent, with extended curtailments of four weeks at Houston and Plateau, and six weeks at Mackenzie.

The curtailments are scheduled to run from June 17 through July 26 and are due to very poor lumber markets and the high cost of fibre, which are making the operating conditions in BC uneconomic.

The curtailments will reduce Canfor’s production output by approximately 200 million board feet. Following the previously announced closure of Vavenbyin July, Canfor will have 12 sawmills in Canada, with total annual capacity of approximately 3.55 billion board feet.

In October 2018, British Columbia exported around 514 million board feet to the US, that was down from 645 million board feet the year before.