ALBERTA - West Fraser has announced that it will curtail more production - this time lumber and plywood at its Alberta operations and High Prairie sawmill. The company says the curtailment will give it time to build back log inventories hurt by recent wet weather.
Plywood production will be reduced by 13 million square feet.
In early January, the company curtailed production by 50 million board feet in British Columbia over three weeks. In December, it also decreased production at four of its sawmills. Price declines in lumber markets, high log costs, and log supply constraints forced its hand, West Fraser said.
West Fraser has seen tough times as of late. The holiday shutdown followed soon after the company permanently shut down around 300 million board feet of lumber production at two of its mills for 2019, negatively impacting nearly 140 workers.
Canadian sawmills are clearly struggling. 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 leaders have taken a hit - including West Fraser, Canfor, Conifex, and Interfor - and 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.
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.
Have something to say? Share your thoughts with us in the comments below.