Canfor Corporation said Monday it will be invoking a temporary reduction in production at all solid wood facilities in B.C. and Alberta, due to very weak market conditions.
The curtailments will start to be implemented on December 19 will range from one to four weeks and remove approximately 150 million board feet in December and January.
The company will continue to adjust operating rates to align with market conditions and anticipates that the majority of its BC facilities will operate below full capacity in the New Year.
"We will be working to mitigate the impacts on our employees by providing support and identifying meaningful work during the downtime,” Canfor CEO Don Kayne said.
Canfor also owns sawmills in the U.S., but no curtailments have been announced for the company's American mills.
In October, Interfor had also announced that it would be curtailing production in the fourth quarter of 2022. The company said it would reduce production capacity in B.C. by about 200 million board feet – about 17% of of its production capacity -- but expected to return to a normal operating schedule in January.
Though West Fraser Timber Co. is B.C.’s largest forestry company by market cap, Canfor has the biggest footprint in B.C. It is the single largest tenure holder and operates more sawmills than any other company in B.C. – a total of 10 sawmills, accounting for 29% of the Interior’s lumber producing capacity.
North American lumber prices were strong in 2020 and 2021 and hit record highs in the spring of 2022. But prices have been falling since the beginning of the latter half of 2022, as inflation and rising interest began taking the steam out of new housing construction and lumber demand in the U.S.
Prices for western spruce-pine-fir lumber dropped from a 52-week average of US$846 per thousand board feet in 2022 to US$475 per thousand board feet as of November, according to Natural Resources Canada.
- with files from Nelson Bennett, Glacier Media