With the American Thanksgiving and hunting season behind us, and as we approach the Holiday Season, businesses are winding down for this usual break and slowdown in business until the new year. They are taking this time to look ahead and plan, while remaining cautiously optimistic that inflation will go down, hardwood lumber and products sales will improve both on the domestic and international markets, and that the new year will yield a better profit. With demand still being down for hardwood products, it is challenging to find lumber and logs as production has not increased much, and demand for finished goods also remains on the slow side.
Businesses are purchasing what they need for the short term, only replenishing stocks as required. According to sources, industrial products are more in demand at this time, with the railroad tie and wooden pallet and container sectors the most significant end users. It was noted that 2023 was heading to be a record low year for consumption of hardwoods.
Ash production has been steady over the summer, and so demand for this species has been absorbing developing production, noted contacts. Kiln-dried business is reported as decent, even though domestic and international markets are not strong, it is however keeping inventories low for many grades and thicknesses with prices being noted as steady to firm.
End users commented that Aspen supplies are ample. However, orders are a challenge to find, with pricing being highly competitive. Some sawmills are keeping their Aspen logs to a minimum at this time due to sales issues and possible staining if this species is not sawn at the appropriate time. Demand for green lumber is in line with production output.
Industries that were using Basswood as an alternative to the higher priced species have reverted back to purchasing sheet stock or reverted to buying other species. Competition for orders is intense noted contacts, with the Common grades cited as problematic, although all grades appear to be under price pressure at this time. Green production is low in several regions. With less Basswood being produced, it has temporarily eased price volatility.
With orders for finished goods being low, many secondary manufacturers have reduced their operating hours, thus using less lumber and raw materials. Purchases, say some contacts, are for replacement needs only. Kiln-dried Birch sales are hard to come by, and prices are sliding down. Mills and wholesalers are shipping their limited quantities of green stocks, however, they noted competition is fierce for orders. Sales are for premium color material with prices stable.
There was a slight improvement in demand for Hard Maple, although secondary manufacturers and lumber wholesalers indicated sales of finished goods were not that good. Purchases were made to replenish depleted stocks, as buyers saw a tightening of supply availability. Inventories are still noted as low, with prices continuing to rise for some grades and thicknesses. Green Hard Maple production is low, with some areas struggling to source logs because of inclement weather and weak markets. Secondary manufacturers and wholesalers are working to increase their receipts.
Soft Maple sales are now more closely aligned with buyers’ needs. Prices have stabilized, and are now edging higher. “We saw demand for kiln-dried inventories shift from an excess on markets to hardly available supplies, which resulted in firmer pricing for this species,” said one source.
Red Oak demand remains at a fair pace as it is used in finished goods, in repair and remodelling projects, for solid wood flooring and for railway ties. Kiln-dried demand is outpacing supplies, which raises prices for most grades. End users are absorbing green Red Oak at this time, and supply is not sufficient to meet this demand.
On the other hand, White Oak is in great demand at this time both on domestic and international markets for high-end finished goods. However, the issue is finding logs to supply this need. Prices are rising as a result of this shortage. Most kiln-dried inventories for White Oak are thin for most items.
In early October, the Honourable Filomena Tassi, Minister responsible for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), the Honourable Bardish Chagger, Member of Parliament for Waterloo, participated in the Wood Manufacturing Cluster of Ontario (WMCO)’s Quarterly Networking Event. MP Chagger announced almost $2.9 million in support for the organization so they can help SMEs (small and midsize enterprises) in southern Ontario adopt digital strategies.
The announcement notes Ontario is home to the largest concentration of advanced wood manufacturing in Canada, and the forest industry is a pillar of the Canadian economy. It has over 3,000 companies employing 35,000 workers who contribute more than $7 billion in revenue each year. The Government of Canada supports these workers and the manufacturers that employ them as they evolve, scale up, adopt new processes and technologies, increase their production capabilities and create good jobs for Canadians.
WMCO is an industry-led cluster that supports SMEs across southern Ontario specialized in cabinetry, commercial fixtures and millwork, furniture, flooring, mass timber construction and other niche products. With this investment, WMCO will support manufacturers as they adopt technologies, including supply chain digitization and increased Internet-of-Things capabilities.
WMCO will provide seed funding for up to 50 eligible SMEs undergoing digital adoption projects, creating 50 new jobs. As part of this investment, 50 new products, services and processes will be commercialized. WMCO will also prioritize SMEs in rural and Indigenous communities through targeted outreach activities.
The Government of Canada is investing in manufacturers so they can reach their potential and develop new possibilities for this important industry.
We wish everyone a very Merry Christmas, and a happy, healthy and prosperous New Year!
