As we head into the final quarter of 2023 the market as a whole is stagnant for the most part, with a few exceptions. Continued economic anxiety, high interest rates, and the usual seasonal slowdown are driving factors for the lethargic market. West Coast producers are navigating regional difficulties as well, including but not limited to log supply issues stemming from another brutal fire season.
The following is what a few of those producers had to say:
Dean Garofano of Delta Cedar Specialties, Pitt Meadows, BC said, “The drought in Coastal British Columbia that contributed to an extraordinarily long fire season appears to be over now. Rain has finally found its way to the Coast, lowering the fire danger class in most areas from extreme to moderate. During the extended shut down, many manufacturers found themselves with a lower log inventory than they anticipated and are now finding it difficult to replace certain sorts. Recently, loggers have been starting up projects again in an attempt to pick up lost revenue from the extended shutdowns.”
Garofano continued, “The Cedar log shortage through the summer month droughts has led to the recent firming and increases of log prices. With logging projects starting again and an expected slow fall and winter lumber market, further log price increases would be prohibitive. Most Cedar lumber items have been moving but at a slower pace than usual, and there are still some oversupplied items. Cedar boards and rough dimension continue to be difficult to sell in any significant volumes, regardless of pricing. Projecting ahead, most distributors are expecting 2024 to be the same or only slightly better than 2023. Therefore, marginal increases in demand are expected. Distributors are concerned about how the current economy and possible future interest rate increases will impact demand for next year. Meanwhile, coastal manufacturers’ biggest concern is the log supply, as they look ahead into 2024. It will be interesting to watch the supply and demand balance play out next year and how it will impact pricing. There are still some rough waters ahead.”
Mark Gray of Patrick Lumber Company, Portland, OR said, “Overall, there is a solid flow of supply to complement demand in the western United States. Some species and core sizes have extended order files but that’s been the new norm. As long as customers can plan ahead, I don’t see any issue covering orders throughout the balance of 2023. Prices have stabilized, and customers seem to be gaining confidence in building their inventories.”
Gray continued, “The business climate seems positive, overall. While each region ebbs and flows with each month actively, most have said 2023 is shaping up to be better than expected. One challenge is activity is not as predictable as prior years – one distributor told me, ‘some days are busy, other days are dead,’ but even though it’s not consistent when we look at our month-end numbers they always seem to be better than expected.” Gray finished with this, “Labor continues to be a challenge. Weather has been pleasant Q2 & Q3. Parts of August were quiet as I think more people were taking vacations than prior years. This year has been better than expected for Patrick.”
Aidan Coyles of Gilbert Smith Forest Products, Barriere, BC said, “Demand and supply of STK is leveling out with the exception of 4” material. Price is all over the place but levels seem to have stabilized (may change if Interior mills ramp up Cedar production again). No urgency to buy from the customer front, high interest making many retailer/distributors reluctant to take on inventory that will sit until spring. Log supply is up in the air, still very competitive on Cedar, price has reached the lowest it will go on the log front. Labor is always a challenge and will continue to be, especially with seasonal sickness added into the mix. I think I have to rate the year at a 4/10.”
