Resolute Forest extends sawmill shutdown, cites worsening market
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IGNACE, Ont. - North American lumber giant Resolute Forest Products will extend a shutdown of one of its Ontario sawmills into July. The company said worsening market conditions and a problem with the sawmill's kilns as reasons.
 
The initial shutdown, announced on April 11, was planned for two months and resulted from a shortage of logs. The mill was set to resume operations this week.
 
But the North American lumber market has been in dire shape as of late, which Resolute says is leading to lower prices and sales.
 
A Resolute spokesperson told TBNewsWatch that the company is assisting employees in finding job opportunities at its nearby Atikokan and Thunder Bay mills. Workers are also eligible for unemployment benefits.
 
Last October, Resolute invested $40 million in its Ontario operations and added 25 jobs.
 
$5.4 million was allocated to optimize its Atikokan, Ignace and Thunder Bay sawmills. These initiatives were expected to increase the annual production capacity of the facilities by a combined 50 million board feet of lumber.
 
"Ontario's forestry sector is a very important part of our economy, it is one of the largest employers in the province. A strong forestry sector is essential for our prosperity, and it has a significant impact on the people living in rural and Northern Ontario," said Ontario Premier Doug Ford. "It is because of productive partnerships like ours with Resolute that the sector continues to thrive, and we will continue working to create more opportunities for the people of Ontario."
 
Softwood lumber import tariffs of around 21 percent were levied onto Canada last year. The National Association of Home Builders (NAHB) told MarketWatch that those tariffs are restructuring the entire lumber global supply chain - incentivizing U.S. buyers to import from overseas rather than ship lumber across the Canadian border.
 
Canada's imports to the U.S. have certainly slipped, as we've covered before. British Columbia - Canada's largest lumber-producing province - exported just over 514 million board feet of lumber to the U.S. in October 2018, down from 645 million board feet from the same time 2017.
 
Many Canadian lumber companies, including West Fraser, Western Forest, Canfor, and Conifex, have restricted lumber production, with West Fraser and Canfor curtailing production more than once.
 
All cited challenging lumber markets, high log costs, log supply constraints, falling lumber prices, and U.S. import tariffs as factors.
 
Resolute has seen ups and downs. The company has seen a 17 percent increase in shares since the beginning of 2019, but an overall decline of 21 percent in the last 12 months. 
 
Resolute employs close to 900 workers across its Northwestern Ontario pulp, paper, wood products and woodlands operations. The company has invested approximately $200 million in the region over the past several years.

 

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Robert Dalheim

Robert Dalheim is an editor at the Woodworking Network. Along with publishing online news articles, he writes feature stories for the FDMC print publication. He can be reached at [email protected].