West Coast Business Trends

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West Coast Business Trends 1
By Zach Miller

At the time of this writing West Coast producers and distributors, seemed to agree this has been a difficult year. The marketplace has been sluggish for most products, the days of order taking are over. Buyers are taking short positions replenishing when needed and not really building inventory. It’s been an uncertain year, with new Softwood Lumber Duties coming into effect shortly, multiple West Coast mill closures continue to shift the landscape and a hot dry summer season that fosters the fires that we have come to accept. The following is what a few West Coast manufactures had to say:

Dean Garofano of Delta Forestry Group, Pitt Meadows, BC, said, “Markets overall continue to lack energy, other than demand for 6-inch tight knot Cedar. High interest rates and poor economic numbers continue to impact demand in the U.S., as painfully evident by all the mill closures this summer in the Western region of the U.S. With the poor economic numbers coming out recently, it is likely the Federal Reserve will start to lower interest rates soon in hopes to stimulate more activity. We at Delta Forestry Group have been fortunate to have some strong program business that has kept our sales very steady year to date.”

Garofano continued, “With the hot dry weather, fire season is in full swing now with most logging shut down on the BC Coast. Log supply was already tight prior to the shutdowns and will likely remain that way for the balance of the year. However, it does appear that the supply demand ratio is balanced right now, with both on the low end.

Despite the tight log supply, Cedar log prices have stabilized over the past month. We are all waiting for the official duty lift, expected very soon, that will add more cost to the price of lumber. There has been some talk between the U.S. and Canada lately about a possible negotiated settlement. Talks are very preliminary and may not gain any traction but an agreement that works for both sides would be a welcome outcome for an industry starved for good news.”

Parker Wildeboer of Majestic Forest Products and Valley Milling Lumber of Eugene, OR, said this about Western Cedar (WRC), “Supply and demand balance is not in step right now on WRC patterns, decking and dimension. Demand seems to be exceeding availability which is driving up price across the board. People who do not have standing orders with mills do not have readily available access to fiber. The only way to get some right now is to be in line for the next cut or even the cut after in some cases. The market is active but difficult due to availability issues. In short, you can get into about as much business as you can find material to cover. There are lots of people hunting around for this or that, sadly there’s just not the material out there to cover some of them, even though everyone would love to sell it and the customer would love to buy it. For example, I saw an inquiry for like 200M of 1×6 Tongue and Groove; should be easy/great business in a flush market, but this customer was hunting around all over because nobody can seem to cover it. The customer is a large retail chain too, I imagine they have lots of contractor orders that will be rather late.”

Wildeboer continued, “The recent mill closures are definitely having an impact. A few of those mills made special sizes of timbers or did a lot of resawn texture timbers for the California market. This left those folks scrambling to figure out how to keep those channels alive with timbers from other mills. Hasn’t been awful for remanufacturers like our plant though, there’s now more timber resawing/surfacing business than our machines could ever do, having to say no to some of it even. The C&D closure is very bad, and I am interested to see who picks up the fiber they were feeding that mill.”

Aidan Coyles of Gilbert Smith Forest Products, Barriere, BC, said, “Supply is limited, still trying to get caught up on order file. All 6-inch products are leading the way in terms of price and demand. I’ve seen good value uptick in 6-inch where 4-inch and 8-inch is stagnant in terms of price. Our customers are noting things are starting to slow down marginally, and delayed order files are still keeping people busy enough. Log shortages are anticipated heading into the fourth quarter due to reduced logging ability because of the recent hot weather and salvage logging from previous years fires. The Whitewood market being repressed is also not incentivizing much harvesting activity.” Coyles finished by saying, “The recent local mill closures haven’t impacted us directly yet, more phone calls and interest in our products as a result of lost supply from either mill closures or just seasonal low supply.”

By Zach Miller

Editor and fourth generation of the Miller family to work at Miller Wood Trade Publications.

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