Ontario Business Trends – October-November 2022 

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As we head into the fall season, with summer’s up-and-down activity for stocks, businesses are being cautious with their purchases. It was noted that green lumber availability had improved this year, thus businesses had ample lumber. Competition intensified for green lumber which resulted in downward price pressure for several key species. Since green output rose, kiln-dried inventories also improved. As summer drew to an end, however, there was a slowdown in sales for developing production. With lumber availability being strong, prices were going down and some felt they may drop further.
Demand for Ash continues to be steady on international and domestic markets, thus inventories of this species are low. FAS demand is better than the Common grades. Production is meeting demand for mills and wholesalers. Aspen producers noted that demand is solid for developing supplies, and production has gone up slightly, thus end users have more available inventories.
As Birch is often used as a lower priced alternative to Hard and Soft Maple, demand for this species is strong on local and overseas markets. Price-wise, it was reported, Birch still has an advantage over Maple even though Maple’s prices have dropped. Demand is good for the upper grades as are markets for green stocks.
Basswood also saw a drop in demand. This is related to Poplar prices which are impacting demand of upper grades for this species from the millwork and moulding sectors. However, interest for Poplar is solid keeping prices steady for kiln-dried stocks. Demand for lower grades softened, but it is still absorbing production.
As Hard Maple has been a top seller for the past couple of years with prices reaching all-time highs, there has been a shift from an inventory building mode to purchases for replacement needs. This change is having a downward impact on prices. As kiln-dried Hard Maple is readily available, there is increased competition for orders, and prices are responding. For color classifications figures are reduced, noted contacts.
There is also a reported slowdown in Soft Maple business, supplies being higher and a weaker short-term demand. Thus prices are down, as well for color designated grades. Kiln-dried inventories increased, especially in the Appalachian region.
Sawmill owners are processing more Red Oak, and so supplies are outpacing demand, resulting in downward prices. Reports stated domestic and international markets are not good, with exports flat compared to last year. Some buyers are able to source Red Oak on short notice and are buying only what they need. White Oak supplies are also outpacing market needs, therefore price reductions are being felt both in domestic and international markets.
Jonathan Wilkinson, Minister of Natural Resources, announced a $1-million contribution to the Wood Manufacturing Cluster of Ontario (WMCO) to support a study involving 10 collaborating wood manufacturing small and medium enterprises (SMEs) across the cabinetry, commercial millwork and furniture sectors. The study will highlight the importance of industry-led clusters to identify and leverage new opportunities for the wood manufacturing sectors.
“Canada’s competitive and resilient forestry sector supports good, middle-class jobs in communities across the country — including in Indigenous, rural and remote communities,” said Minister Wilkinson. “This represents the livelihoods of hundreds of thousands of Canadians. The funding will support innovative Canadian SMEs, helping them to seize new opportunities for business and workers in the wood manufacturing sector while showcasing the benefits of industry-led collaboration.”
The project aims to integrate Industry 4.0 technology for the optimization of information and material flow to establish an industry roadmap for SMEs. This roadmap will enable future investments and demonstrates the role of Canada’s forest manufacturing enterprises in utilizing innovative technologies. This investment will allow Canadian businesses to diversify and can help to sustain Canada’s forest sector while creating best business practices on the road to net zero by 2050.
Funding for this project is provided through the Investments in Forest Industry Transformation program, which encourages the Canadian forest sector to adopt innovative technologies and processes to establish new product streams and emerging markets. By investing in innovative forest sector technologies, the forest sector is providing greener solutions that help tackle climate change and transition to a low-carbon economy while increasing its competitiveness on a national and global scale.

By Miller Wood Trade Publications

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

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