Wood Dr.: Canadian purchases of U.S. sawmills could drive lumber prices higher
November 26, 2018 | 9:27 am CST

Several weeks ago Canfor Corp. announced it entered into an agreement to purchase Elliott Sawmilling Co., Inc. located in Estill, South Carolina, for a purchase price of $110 million.

The transaction will be completed in early 2019. Elliott has a production capacity in excess of 210 million board feet and the sawmill consists of both large and small southern pine log lines. 

Canfor is a leading integrated forest products company based in Vancouver.

Gene Wengert, the Wood Dr., believes that this and other purchases may lead to additional shortages of lumber used in home construction in the U.S.

“Southern pine is extremely strong and is desired worldwide for construction of trusses for homes and other wood-framed buildings,” he said. “About half of southern pine is pressure treated to prevent decay and insects.”

With the large number of southern pine sawmills purchased by Canadian firms, and when the price is favorable, we can expect, with the Canadian expertise in exporting, that exports of southern pine lumber will increase,” Wengert said.

“The response in the U.S., which already imports one-third of the lumber used for framing houses and multi-family buildings, will be lumber shortages and further price increases.

“Price increases in lumber and other building products will, in turn, (reduce) housing starts and demand for hardwood cabinets, furniture, flooring, and even paneling.

“In short, anything we can do to encourage housing starts (keep them over 1.25 million annually) and remodeling will be an advantage to our industry.”

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Karl Forth

Karl D. Forth is online editor for CCI Media. He also writes news and feature stories in FDMC Magazine, in addition to newsletters and custom publishing projects. He is also involved in event organization, and compiles the annual FDM 300 list of industry leaders. He can be reached at karl.forth@woodworkingnetwork.com.