Circumstances for North America softwood lumber and panel production and sales changed dramatically since summer. To say it was a complete reversal is not an overstatement.
Since Labour Day, the supply-demand balance tilted completely in favour of customers; as sawmills were replete with both lumber inventory and log supply, while order files were a scant few days. By Canadian Thanksgiving North American lumber manufacturers were looking at scaling back operations. Murmurs of seasonal curtailments abounded.
In mid-October there unfortunately erupted a labour dispute in northern British Columbia, which — at time of writing — had put a ban on overtime, then started rotating strikes (which affected Canfor’s Prince George sawmill and chip plant, and Tolko’s Lakeview sawmill). As job actions were being taken by the United Steelworkers Union, several employers announced seasonal and maintenance downtime and curtailments.
It is important to remember that this is the normal slow-down time cycle for forestry. The old adage is “Labour Day is the beginning of the end and US Thanksgiving is the end of the end.” As winter comes on in major home-building regions, construction activity slows down. The value proposition for sawmills is to end the year with no lumber on hand and the log yard fully stocked. For 4Q generally, the game is afoot where customers only order wood for immediate needs and sawmills try to produce just enough to be able to sell out before the end of the year.