As we kick off 2024, the North American lumber market could best be described as lackluster. West Coast manufacturers are dealing with a myriad of issues beyond the seasonal slowdown, including tight fiber supply, weather related issues, and overall economic uncertainty. The following is what a few West Coast producers had to say:
Mark Gray of Patrick Lumber, Portland, OR, said the following in regard to high grade Softwood lumber: “Overall, lumber supply is still tight. Each specie has its own story but I don’t think anyone is swimming in wood. Prices are staying consistent/firm. November and December were much quieter, which is to be expected with the winter slowdown and we anticipate that to carry over into winter 2024. Not much has changed from prior months, high-grade logs are still hard to come by (both USA & BC). Logging volumes usually quiet down in the winter as well.
We’ll see if seasonal slowdown offsets lower production volumes… TBD. We’re not experiencing any labor challenges at the moment but we’re only running one shift, i.e. winter. I don’t think transportation is an issue. Lots of unknowns – election year, interest rates? recession? Who knows… everyone will tell you a different story. We’ll still be showing up to work everyday though.”
Jack Hetherington of Skana Forest Products, Richmond, BC, said, “Supply and demand for the most part now appears to be in general lock step. Business can be spotty but there’s generally enough fiber to fulfill spotty general needs. Frustration is often the verbiage used to describe the marketplace. Volumes are down – the economy is in general – although somewhat manageable turmoil. Labor can also be problematic, while tight government edits can be annoying in an up market they can be sometimes intolerable in a down market. One of the worst fire seasons in Canadian history has created serious issues but has been handled with great aplomb. Transportation has for the most part, depending on region, been a non-event, the availability of trucks for most lanes being generally satisfactory.”
Hetherington continued, “I feel that with the coming of 2024 and with any recession subsiding as the BOC (Bank of Canada) gradually lowers interest rates, combined with the rapid influx of more new immigrants from around the world creating the need for more housing, much more will indeed be needed. The recession will now be in our rear view mirror and we’ll all be once again singing ‘Good Times Are Here Again’.”
John McDowell of Oregon Industrial Products, Springfield, OR, said the following in regard to supply and demand, “Yellow Cedar clears are moving steady, STK not so much and LAM stock is pretty slow. Prices for Red Cedar clears are high so supply must be tight, Doug Fir clears are also still high, 6-inch and wider are still really tight – same with VG Hemlock. The upper end items seem to be coasting given the time of year but no one wants to hold inventory. It’s very hand to mouth purchasing. We’re pretty comfortable with our supply right now and are looking forward to a similar year as 2023.”
Dean Garofano of Delta Cedar Specialties, Pitt Meadows, BC, said “Well, 2023 has proven to be a difficult year for most Coastal operators here in British Columbia. Lumber markets were soft coming out of 2022 and stayed that way, leading to high lumber inventories and little appetite to purchase more logs. This, along with the continuation of the BC Government old growth deferrals and other anti-logging policies, resulted in most logging permits and cut blocks being under water economically.”
Garofano continued, “If that was not enough, just as log demand picked up late spring, we went into the worst and longest fire season in many years. The result is the continued shrinking of the Coastal Forest industry, with the harvest down more than 15 percent from 2022. One would think that the lack of log availability overall would have led to higher log values; however, lumber demand is also way down. So, for most of 2023 we had very low supply along with very low demand and there is not a lot of optimism that 2024 will be much better.
Here at Delta Forestry Group, our sawmills battled the log shortages all year, but our Cedar program stayed strong thanks to our long term valued partnerships on our program business. Our DC Supreme and Superior, as well as Premier timber products had steady take-away all year. For 2024 we are expanding our Hemlock program through the direction of Rick Harris. We offer a wide spectrum from low grades, dimension, and specialty timbers, right through to shop and VG clears. Although 2024 will present continued challenges, we are excited about the continued success of our Cedar programs and the expansion of our Hemlock programs.”
Aidan Coyles of Gilbert Smith Forest Products, Barriere, BC, allowed the following on supply and demand: “Uneven demand between uppers STK and low grade, starting to see some increased demand across all items, price remains flat. Customers were not in a hurry for wood the remainder of 2023, looking forward to Q1 (2024) with mixed feelings, some more optimism out there. Logs are tight, large logs are a challenge. Weather has been better than anticipated. Trucking is a challenge on the board side due to limited driver availability around the holidays. Hopefully it’s a steady year with nothing crazy, normal would be great.”
