An Editorial Opinion – Right From The Stump, July 24, 2023 (Table below updated Aug 4, 2023)
(This post is an updated version of an article originally published in the View From The Stump newsletter, June 2023, under the same title. If you are interested in reviewing the newsletter, please contact me at david@spartreegroup.com. Also, a complimentary full version of the October 2022 edition is available at viewfromthestump.com)
The list of British Columbia forest products manufacturers temporarily curtailing or permanently closing their facilities continues to grow due to a variety reasons. A list of mills closed or curtailing since the start of the year is provided below.
RECENT ANNOUNCEMENTS: Canfor Pulp’s Northwood pulp mill in Prince George experienced a short curtailment for a week in mid-July in reaction to the recent port strike. And Mercer’s Celgar mill announced at the end of last week a one-month outage due to the port strike having affected railcar circulation. I would suspect there are other forest products manufacturers that are being affected in a similar way.
On the BC Coast, Teal Jones announced a seven-day curtailment of its coastal sawmills in Surrey at the end of June. Western Forest Products saw some of its BC sawmills take a few weeks of downtime in June and into the first half July. And Ledcor says it is permanently closing their sawmill in Chilliwack by the end of August. Q3.
Note that the list provided here is not a complete representation of the situation – there are several mills said to be operating at significantly reduced production. Lumber markets have improved modestly (although are still likely to be at levels where they are not profitable), while pulp markets are in trouble. Softwood pulp prices, especially for Western Canadian pulp mills exporting to China, are particularly tough.
What is very apparent is that this province has become North America’s epicentre for capacity closures. Government policy, economic available timber supply, market conditions, and labour outages have created one reason after another for turmoil. Interestingly, wildfires, which have undoubtedly affected harvesting operations, have not been publicly cited as a source of (announced) outages at mills, at least in British Columbia.
Unfortunately, this downtime list update will not be the last – expect more closures to come…
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Written By David Elstone, RPF
Publisher, View From The Stump newsletter
Managing Director, Spar Tree Group Inc.
david@spartreegroup.com