Quebec Business Trends – August/September 2022

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It has been a busy spring and early summer period for hardwood businesses. The housing market in both Canada and the U.S. is still strong even though there has been reported slowdowns in the number of starts in both countries as there is a strong renovation market. Export markets are faring well, noted contacts. With the July construction break in the province, there was the usual slowdown in the industry.

Sellers of Ash reported favorable market conditions. As the Emerald Ash Borer has decimated many trees, Ash timber and log availability were curtailed, and so sawmills stopped cutting Ash in both U.S. border states and areas in the province of Quebec. As competition of Ash lumber has lessened, mills processing this species are finding outlets for their developing production with prices being firm. Drying operations also have solid orders against limited supplies for kiln-dried stocks for both export and domestic markets.

The regionally important species, Hard Maple is still in great demand from cabinet and wood component manufacturers. It was noted that they had purchased large quantities of this species in the last two months and had reigned in their purchases at this time. Wholesalers also report business is brisk for Hard Maple and have adequate inventories. Kiln dryers reduced prices for certain kiln-dried items for easier sales. Soft Maple sales are following similar to those of Hard Maple. Supply and demand are balancing out as well, as has happened for Hard Maple. It is a highly popular species among cabinet, furniture, and wood components manufacturers. Supply is ample to meet demand.

Exports of Cherry to China are losing momentum. Delays were reported in the spring for transport trucking and port shutdowns, where delays in shipments were the norm. There has now been some improvements with movement starting to happen, so buyers’ products surged. Some even over ordered to hopefully receive minimum quantities of lumber to sustain their business. Orders have now started to come in. Cherry demand on domestic markets has been steady even though buyers limited their purchases as Cherry is a minor species in many markets.

Contacts reported that Oak sales to residential flooring and truck trailer flooring manufacturers were fair at this time. Supply is sufficient to meet manufacturers’ needs, some say even more than they need. White Oak residential flooring was reported as moving better than Red Oak. However, it was noted that prices were pressured for both Red and White Oak. Sawmill operators and wholesalers find it more challenging to sell Red Oak. Caution was used when purchasing Red Oak; for certain grades there were concerns surrounding ongoing Chinese business. Several contacts commented supplies were starting to outpace demand for kiln-dried Red Oak and kiln-dried No. 2A is ample to supply demand.

Contacts report export business conditions for White Oak vary depending on markets and grades referenced. Orders in Europe have lessened as large volumes over the past several months were shipped, and due to they’re heading into summer vacation period. Kiln-dried stocks, were moving well to Southeast Asia noted contacts.

Poplar markets are less robust than in 2021 and early 2022, commented contacts, caused by higher supply rather than lower demand. More work is needed to make a sale for Poplar and generate orders. Exports of this species to Vietnam are fairly good and to other Southeast Asia markets, but are not seen as strong. Prices have decreased as a result.

Domestic demand for Walnut and to the U.S. is steady. No. 1 Common and No. 2A kiln-dried inventories are selling more easily than FAS. As inventories are still elevated for this species, green Walnut is not moving well.

Furniture manufacturers are purchasing large quantities of hardwood for frames as business for furniture is steady from consumers, along with the strong housing market sectors in Canada and the U.S.

In early June, the Honourable Jonathan Wilkinson, Minister of Natural Resources, announced over $2.4 million in funding through the 2 Billion Trees program (2BT) to Trees for Life. This tree planting will help Canada’s efforts to tackle the crises of climate change and biodiversity loss. Trees capture and store carbon from the atmosphere, improve air and water quality, support biodiversity and create and support thousands of good jobs.

With this funding, Trees for Life will engage partners and collaborators on 34 different tree-planting projects. These projects will range in size, style and scope and, working in different communities and ecosystems, will plant approximately 600,000 trees in British Columbia, Alberta, Ontario, Quebec and New Brunswick this tree-planting season. Trees for Life is a national charity committed to mobilizing, empowering and inspiring tree-planting initiatives across Canada.

Launched in 2021, 2BT is part of the Government of Canada’s broader approach to nature-based climate solutions. It contributes to Canada’s efforts to mitigate climate change while achieving key biodiversity and conservation goals, as well as supporting human well-being.

The program is on track to reach the target of two billion trees over the next decade and is designed to support organizations across Canada in planting an increasing number of trees each year. In its first year, the program signed agreements to support organizations in planting approximately 30 million trees, representing more than 50 species, at more than 500 sites across all provinces. Going forward, the Government of Canada is entering into long-term agreements to secure planting over 10 years. By 2026, the program aims to plant 250–350 million trees annually.

By Miller Wood Trade Publications

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

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