As we head into winter, the Hardwood industry is preparing as best it can to get through this season and the upcoming Holiday Season, which brings the normal slowdowns in production and manufacturing. There is also the continued uncertainty of COVID-19. In Quebec and Ontario, a second wave hit in mid-September putting a strain once again on the workforce with distancing and other safety restrictions. In some areas across eastern Canada, there is a shortage of Hardwood log supply due to low pulpwood markets along with a shortage of forest and sawmill workers. Some contacts noted that Maple and Birch items were in short supply due to strong demand from the U.S. flooring, furniture, and cabinet sectors. Demand for pallet cants and railway ties is slower but steady. Exports to European and Asian buyers also remain steady.
Contacts commented that Aspen volumes have been working their way down, with improved demand since the onset of the COVID-19 pandemic. Sales of this species rely on established business, they added. Prices were reported as steady to firm for kiln-dried No. 2A and Better. Production of green lumber had been controlled over the summer but had gained traction heading into the fall and early winter. Supply is meeting buyers’ needs. Ash markets have slowed, and so sawmills have reduced production or even avoided it. With colder weather here, sawmills can increase their production of a variety of species that are susceptible to stain. As a result, Ash inventories have contracted over time. Prices are firm to rising for selected items.
Sales of Birch are strong to moulding and millwork, wood component and cabinet manufacturers. Markets for green and kiln-dried Birch improved, particularly for 4/4 lumber, with supplies meeting demand, with prices steady.
Whitewoods are being processed now as cooler weather sets in. The solid demand for Hard Maple has caused an increase in logging and sawmill activity for this species. Contacts note that they sometimes have a shortage of No. 1 Common and Better grades to meet buyers’ needs. Prices have trended upwards, as well as for that of green stocks. Depending on regions contacted kiln-dried inventories are varied, with supplies of No. 1 Common and Better being thin, while inventories are adequate for No. 2A and thicker stocks of No. 1 Common and Better.
Demand for Soft Maple has risen with the improved housing markets and the construction sector over the last three months. Kiln-dried inventories declined from their high level earlier this year. Sales of this species are steady with firm pricing for kiln-dried Unselected and Sap and Better No. 2A and Better grades. Some areas reported higher green Soft Maple production where markets readily absorbing the No. 1 Common and Better grades at firm prices. Sellers are able to ship total output, but demand is not as good as for No. 2A or thicker stocks.
Some wholesalers reported low kiln-dried 4/4 No. 1 Common and Better inventories for Red Oak where there is a rising demand for these grades and thicknesses. Some expressed concerns there may be a shortage of supply of this species over the winter, as sawmills move to producing more whitewoods. Wholesalers and secondary manufacturers are looking for more green lumber. Prices have risen slightly for various grades and thicknesses contacts commented.
There is solid interest for White Oak, especially in the U.S. border states. As well, domestic and international markets are looking for more upper grade material, with an improved demand for the Common grades. Contacts noted that prices of kiln-dried stocks moved higher. Markets for green White Oak are mixed.
The government announced it will spend $1 billion on a Rapid Housing Initiative (RHI) aimed to create new affordable housing for people who are “vulnerable.” The new program is administered by Canada Mortgage and Housing Corporation (CMHC) and is expected to enable rapid creation of up to 3,000 new affordable housing units across the country and stimulate the economy. The RHI is the newest program of the National Housing Strategy, a 10-year $55+ billion plan. Funding will cover construction of modular housing, the acquisition of land, and the conversion of existing buildings to affordable housing. Municipalities, provinces, territories, Indigenous governing bodies and organizations, and non-profit organizations have the opportunity to participate in the program.
In addition to the RHI, the federal government will allocate $236.7 million through its Reaching Home: Canada’s Homelessness Strategy as part of its emergency response to homelessness exacerbated by the COVID-19 outbreak. The funding is in addition to the $157.5 million announced in April 2020 to help communities address the immediate impacts of the pandemic. The RHI is a targeted response to emerging pressures from COVID-19, the statement explained, and it is expected that all funds will be committed by March 31, 2021.
We wish everyone a happy, healthy and safe Holiday Season and hope for a much improved 2021.
