Canadian Business Trends – June 2022

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Hardwood lumber is moving well in Quebec and Ontario, despite a number of difficulties.

A sales and marketing representative for a lumber producer in Quebec said, “The market is really hot; the problem is obviously the supply for everyone. For us, we’re trying to basically accommodate the clients that we already had, so it’s a little tough for us to find new clients, because we don’t have the supply.”

He noted that their main problem at the time of this writing is challenges involved with building back inventory. “I think we’re starting to see that we’re slowly building back our inventory but we’re all going to see the difference eventually. We’re gonna feel when the prices are hitting an all-time high and it’s been a bubble like anything else right now.”

His company deals primarily with Hard and Soft Maple, Yellow Birch, Red Oak and a smaller percentage of all the others like Basswood and Aspen. “The hottest species would be Yellow Birch first, which is really tough to supply right now; everybody’s asking for Birch. It’s reaching the same price as Hard Maple, which is not normal. Second would be Hard Maple and Soft Maple. And lastly would be Red Oak.” They produce 4/4, 5/4, 6/4 and 8/4 thicknesses, with 8/4 being a top seller.

His customers are both distributors and end-users. “They are finding the prices too high, but they have no choice,” he stated. “It’s the same thing for us, where we have trouble getting as much supply as we used to, so we are happy in the end. Of course, if we could have more lumber, it would be even better for us.”

He concluded by stating, “Transportation is really tough for everyone, so we have to work with our freight department to try to figure stuff out. The prices keep going up every week or so and the booking, so it’s hard to work with our customers to have an official date of transportation but we’re getting through it. But eventually, it has to stop, because it’s been like that for a year, and the past three months have been really tough.

“We used to have two trucks and labor is tough also, so we only have one truck on the road and we’re trying to fill in the spot,” he continued. “But everything else that goes to the U.S. for instance, that’s all contract. And it’s expensive and it’s tough to find people. I’m guessing because they have trouble with labor across the border, as well.”

Another sales representative for a lumber distributor in the Quebec region noted, “The market is very brisk and our biggest issue is supply.” For his company, White and Yellow Birch along with Hard and Soft Maple (all 4/4) are top sellers, in No. 3 Common and Better.

Selling to manufacturers, distribution yards and export markets, he noted that the company covers everything from flooring plants to cabinet manufacturers. Those customers are primarily unhappy about the price increases they are experiencing. “We have a love-hate relationship,” he said. “They hate me when I give the price increases to them but they need the material so we’re all kind of in the same position.”

He concluded that truck availability and freight rates are key issues affecting their business.

A sales manager for a supplier and exporter of Hardwood in Quebec agreed that the market is still quite strong in the provinces of Quebec and Ontario, as many of their customers are booked multiple months ahead. He is seeing the strongest sales in Hard Maple (4/4 and 5/4 in No. 1 Common and Better), and in White and Yellow Birch. “In Yellow Birch,” he said, “pretty much every thickness is very hot, in No. 2 Common and Better, from 4/4 through 8/4. The demand is increasing and the supply is reducing so we’re seeing very strong price hikes on that species.”

He commented that his customers in the local market tend to have smaller orders and are quite busy, particularly among the stair-building, kitchen cabinets and flooring sectors. His export customers are primarily furniture manufacturers throughout Asia and they also are experiencing a strong market for their products, although not to the extent seen in North America.

Regarding transportation, he explained that for exports, “We’re seeing small increases in price, maybe 10 percent. Many times, we have orders ready, but they keep rolling our books out further. The average delay is about four to six weeks more than what’s usual for these containers.”

He also noted significant challenges with local shipments due to the limited number of trucks available and increased pricing. “We’re seeing price increases on freight going to the U.S. and long distances in Canada,” he said, “maybe 25 to 30 percent increases in prices. For freight to Michigan, it used to cost us around $5,000 Canadian, and now it’s more like $7,200. This has happened within the past 60 days.”

In Ontario, a sawmill representative said the market is “good. Lumber is selling well. Getting logs is a challenge; there’s always somebody who will pay more than they’re worth. Other than that, it doesn’t matter what you saw, you can sell it for a good price.”

The market is “definitely better” than it was several months back, he stated.

His mill manufactures lumber up to 8/4 in mostly Hard Maple as well as Birch, Basswood, Ash and Red Oak. Grades include No. 2 and No. 3A, No. 1 Common and Select and Better.

His customers include both distribution yards and end users. He sells directly to a foreign manufacturer. “Flooring manufacturers are paying well, which is a good indication of the health of their business,” he said. “Other customers are doing well, too. Right now, if you can’t make a dollar in this industry, you’re in trouble.”

As for transportation, he noted, “It’s hard to get trucks for sure.” He doesn’t export or utilize rail.

An Ontario concentration yard representative said, “Our No. 1 species is Hard Maple, so the market is still very strong for us. We generally sell all over North America and export but it’s really the domestic markets in Canada and the U.S. that are still strong. We can’t produce enough Hard Maple or Birch to keep up with demand right now.”

Compared to a few months ago, this lumberman said the market is “about the same. It’s been going pretty strong. The species we deal with, white woods in general, have remained pretty strong for the last year. The demand is the same but there’s a constraint on supply right now.

“We bring in green lumber,” he continued, “and we’re still getting our fair share because we buy in up-and-down markets all the time. But there is upward pressure even on lower grade material from truck-flooring companies buying No. 1 Common brown Hard Maple. Things like that that are uncommon but are happening because they can’t get enough of the No. 2 and No. 3 Common that they would normally use.”

Besides the species already mentioned, the Hardwoods he handles include Red Oak, “which is selling OK I would say,” he commented, and Aspen “which is strong, too.” His lumber comes in No. 2 and Better.

He sells to distribution yards and end users, specifically cabinet companies “which are still very strong,” he stated. Sales of white woods to distribution yards are strong, he added. “We’re struggling to keep up with demand,” he observed. He said his customers’ sales are strong.

“Trucking is definitely affecting our business,” he remarked. “We used to pick up the phone and have trucks here the next day or the same day, but now we’ve got to plan ahead more and be proactive about when we need to ship. We’ve found the good relationships we have with the trucking companies to be pretty valuable lately. But the cost has gone up in the last six months as well.”

By Miller Wood Trade Publications

The premier online information source for the forest products industry since 1927.

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