Guest Writer
On the SPF side, “Technically it is really quiet, looking at say Montreal and Toronto, we are noticeably down over last year and production is still booming,” reported one Quebec wholesaler. “Housing starts are down and interest rates are the main reason why they are not building right now and the renovation is down as well. Nothing is selling better than anything else – even the low grade has been down, MSR lumber for trusses has been down as well.”
Noted a Quebec producer, “I don’t see it getting better for 2024. I think it is going to stay like this. We are already mid-June and we haven’t seen much happening. I don’t want to be too pessimistic but I would say 2024 is going to be a bit of a write off, but 2025 should get better.”
An Ontario manufacturer noted, “The low grade material seems to be selling, like economy lumber for the pallet and box people, that seems to be selling fairly steadily, but construction material is iffy. Building seems to be off because of the interest rates. The potential Canadian Border Services strike is not of big concern at this time – for exporters it should not have a real impact – if you are bringing in material, that might be a different story.”
An Ontario wholesaler reported, “The market is very soft and demand has dried up significantly on both sides of the border, where we work. Do I think it is a long- term thing, no, there is just oversupply in the market and one of the main reasons in my opinion is imports from Europe which are massive, especially on the U.S. side. Also there are an increasing number of American mills, Southern Yellow Pine mills, coming on line. The European wood is way more prevalent than it was five years ago. You would think at this level it would draw attention by the Dept. of Commerce, but for some reason it hasn’t. This significant increase in imports to the U.S. is definitely affecting our business.”
On the Pine side of the market, one Ontario manufacturer mentioned that conditions are “quiet. I wouldn’t say it was dead but it is certainly not the spring rush we would have liked to have seen. Things have slowed down, but material is still moving and I haven’t had to give up really any- thing on price on the upper end.”
This was echoed by a Quebec producer who said, “On the industrial side, that is where the problem is, things have tanked out there. There doesn’t seem to be any movement as far as product. That is about the only thing that has slowed up is the industrial grades. White Pine is like a substitute for the Spruce in the crating and packaging industry and pal- lets and that has slowed right up, which tells you that manufacturing has certainly slowed up, so the demand isn’t there.”
Noted an Ontario manufacturer, “the upper grades – the 3 and Better – are still ok, but we are not moving the volumes that you would typically move this time of year. Everybody is still taking load lots and there is still a good diversification of product. It is just the industrial end, those grades are backing up.”
A Quebec wholesaler reported that is “not a question of price, there is just no demand. There might be some out there who are cutting prices to try to get things going, but really the demand isn’t there, so I don’t know why people would be cutting prices. They are shooting themselves in the foot. It is easy to drop a price, but try to get it back up again.”
According to an Ontario wholesaler, “People are glad to see that so far, forest fires have not been an issue, but if it gets dry, it could become as serious as last year. I know out west it has started already and there has been a fair bit of closures on some mills too through curtailment and wood supply as well. It will take a long time for that to filter through and we don’t have a whole lot of home construction going on right now. It’s died right off and that takes up a lot of the Spruce.”
“I don’t think things will start to turn around until the New Year,” said an Ontario producer. “It is a big wheel to try to turn, but if we get a couple of rate cuts maybe that happens a bit sooner. It’s all about consumer confidence and it is all about the economy. If people feel good about themselves and good about their jobs, they are making some money and their debts are in line, they will spend money. In uncertain times, they are not going to go out and do that job, they will put it off until things get better.”
Said an Ontario manufacturer, “The DIY buyers are not as active now, and that goes back to the retail and service people and that is why we don’t have the orders that we normally would this time of year, because money is tighter. The free money is not out there any more – the CERB money – that was the big boost and people had the time, so they went out and did what they had always wanted and just something to keep themselves busy. But now with inflation….everything is so expensive.”
“The lowering of the interest rates last week, for the first time in four years, is going to create some optimism,” reported a Quebec wholesaler. “It is not going to make a huge difference at the start but when it gets to three quarters or one percent, after a couple of rounds of cuts, that will stimulate things a little bit. The unfortunate thing with the interest rates is that housing is not going to change in terms of price, if anything, it might even get worse. It is going to create an inflationary item there, because people that are sitting on the sidelines right now because that one percentage point is the barrier between them getting a mortgage or not. They are all going to be out there chasing the market once the rate comes down enough and it is just going to fuel the flames again. Prices are just going to go up again. It is a really sticky situation.”
