Quebec/Ontario Business Trends

Sept/Oct Issue

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Prices have certainly come down in eastern Canada. According to Natural Resources Canada’s Current Lumber, Pulp and Panel Prices, 2×4 eastern SPF, in Canadian dollars, averaged $685 for the week of July 30, which is the most current data available at the time of this writing. The 4-week average price was $764 while the 52-week average was much higher, at $1238. Still there were positive comments from the industry about the current situation. 

A Quebec manufacturer reported, “The pricing has certainly subsided of course from the highs, but there is still a fair amount of demand out there.” 

An Ontario manufacturer noted that, “We are still moving a fair amount of volume. Any inventory we might have accumulated in the first nine weeks or so of the slide – a lot of that has been sold or committed to somebody, so we have an order file on certain items.” 

Said one Quebec wholesaler, “The buyers themselves are still reluctant to put both feet in, but they certainly have 2 or 3 toes in the water to see if it is warm enough for them to go full in. It is a matter of time.” 

“Right now the cash and carry, over-the-counter business for all retailers across North America has dramatically reduced, because of the opening of the economy with the COVID situation,” according to an Ontario wholesaler. 

A Quebec producer felt “it is definitely opening up but I think that as soon as school starts in September or even before that, I think people will get back to more of a normal life again. You know that June, July and part of August that cash and carry segment of the market has been relatively quiet.” 

An Ontario manufacturer confirmed that, “Contractor business is still good, and builders they are not stopping, they can’t afford to stop. There is lots of demand for building, but the biggest holdup in construction today is not Spruce, Pine or Fir, or any other species, it is engineered wood products.” 

Said a Quebec wholesaler, “Builders are experiencing delays in getting things like windows and doors, those suppliers are so much behind the 8 ball that it is slowing down construction sites. It is not because of the price of lumber or anything, it is strictly because they don’t have the material. It is pretty hard to build walls and roofs if you don’t have the floors.” 

An Ontario wholesaler noted, “People are not that concerned right now about the impact of the fires. In the Western U.S. or Western Canada, or even the fires in Northwest Ontario, it doesn’t seem to have a real impact on the market today. But all that means to me is watch the last quarter, because I think it is going to rock and roll again!” 

 A Quebec wholesaler agreed, saying, “I think there is going to be a curtailment on production because of the fires and you will see prices go back up in the fall. Transportation does not seem to have any problems. So overall, right now, we are not perfect but we are not in bad shape either.” 

“Things are pretty much unchanged on the Pine end of it. Prices are still firm and inventories are still low,” noted a producer from Ontario. 

“I don’t see anything changing, certainly not until the New Year. Even then, inventories are still going to be low, so I don’t see prices coming off too much,” reported a Quebec manufacturer. 

A Quebec wholesaler said, “This is good for us in the Pine business, but at some point we are all going to be scrambling in the trenches looking for orders again.”

“Renovation activity has come off as far as the Spruce and treated woods, but on the Pine end of it, no, because the prices on the Pine have not escalated as much as the SPF. Red Pine for decking and treating followed the Spruce and now treaters are in an awful pickle,” noted an Ontario wholesaler. “What happened is that the retailers have pulled the horns in waiting for the market to bottom out and the consumers have hung on and are now saying I can probably do this job next year when the prices come down.” 

“White Pine is in good shape, we are not a commodity, we are dependent on the supply and demand, that is just the way it goes it always has been this way,” reported a Quebec manufacturer. 

An Ontario producer said, “We can get the logs, they are available. I don’t see any change there. We are still faced with an increased cost of stumpage. Through the rest of the year we are probably ok. Even if the stumpage was to go down, I think the mills would try to hold the prices because the inventory is not there. Until the supply meets the demand there is no reason to reduce.” 

“Fires are not impacting our region but certainly out west they have and that is the next thing I will say is that Spruce prices have come down there and this will affect that business come the fall,” reported a Quebec wholesaler. “But it won’t be nearly as significant as it was this past spring.” 

“Trucks are always difficult, people are saying it is difficult getting trucks in some areas because the backhauls are not there anymore,” noted an Ontario producer. “Sometime trucks are not able to get to their destinations, so that is creating a bit of a hiccup.”

By Richard Lipman

Richard Lipman Guest Writer Miller Wood Trade Publications

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