Canadian softwood lumber production decreased -7.4% from June to 4,491 thousand cubic metres in July, said Statistics Canada Friday. Production was +1.5% higher than in July 2019.
Canada’s sawmills shipped 4,553 thousand cubic metres of lumber in July, down -4.2% from June and down -0.7% from July 2019.
Lumber companies in the US reached record profits thanks to high lumber prices and declining sawlog costs
Record high lumber prices in the US, stable income for residual chips, and slightly lower costs for sawlogs moved 2Q/2020 gross margins for US sawmills to some of the highest levels seen since Wood Resources Quarterly started reporting this sector’s profitability back in 2005, said Wood Resources International also Friday.
Lumber companies in the US Northwest have seen a dramatic shift in their financial health from late 2018 when most sawmills in the region ran at below cash-costs, to the 2Q/2020 when gross margins were at their highest levels in at least 15 years. — Wood Resources Quarterly
It cannot be overstated how important costs of sawlogs are for a sawmill’s profitability, explained WRQ. Depending on log quality, degree of automation, and end-product, the cost of wood raw-material can account for 65-80% of the total variable production costs.