NA softwood lumber production up in 2012
A survey of Canadian and U.S. softwood lumber producers reveals while North American production was up in 2012, Canada's output was flat.
The latest WOOD MARKETS annual survey of the “top 20” Canadian and U.S. softwood lumber producers shows an uneven trend across North America for 2012: U.S. softwood lumber production increased 6.3% to 28.5 billion bf, whereas Canadian production increased only 0.4% to 22.6 billion bf. Rapidly increasing demand outpaced mill output in 2012, while blockbuster corporate acquisitions and catastrophic mill fires further altered the production landscape.
These and other industry highlights were released this week in the March issue of WOOD Markets Monthly International Report. The consultants at International WOOD MARKETS Group, Vancouver B.C. have conducted this survey annually since 1997.
The top 20 Canadian companies increased their market share of total Canadian lumber production, rising from 75% in 2011 to 80% in 2012. Canfor pulled ahead of West Fraser as the top Canadian lumber producer with 3.8 billion bf of production from its purchase of two sawmills from Tembec in the first half of 2012; Tolko, Resolute Forest Products and Western Forest Products took the next three spots. Together, these five firms produced a total of 11.6 billion bf (52% of Canadian lumber output, up from 48% in 2011). Despite surging prices in U.S. and China in the second half of 2012, it was not enough to change the production response at Canada’s lumber mills from those levels achieved in 2011. A tightening of timber supplies in B.C., Ontario and Quebec were partly responsible.
Catastrophic fires and blockbuster corporate acquisitions played a role in shifting the top 20 landscape in 2012 and the early part of 2013. Fires and/or explosions at Hampton’s sawmill in Burns Lake, B.C.; EACOM’s sawmill in Timmins, Ontario; and Lakeland’s sawmill in Prince George, B.C. together removed about 630 million bf of annual production capacity. Acquisition activity included Canfor’s purchase of two B.C. sawmills from Tembec in 2012; Interfor’s first quarter 2013 purchase of Rayonier’s wood products business (including three sawmills); and Georgia-Pacific’s first quarter 2013 purchase of Temple-Inland’s building products business (including five sawmills). Following the acquisition, Georgia-Pacific will have a total of seventeen operating sawmills and should soar near the top of WOOD MARKETS’ 2013 survey.
With rapidly escalating lumber demand and prices through 2012 and into 2013, companies are increasingly planning to reduce down time, add shifts, and re-open mills. More of this is expected for 2013, as sawmill companies gear up for the potential lumber “super-cycle” that is expected around 2015. This will be a key discussion topic at WOOD MARKETS’ 3rd Global Softwood Log & Lumber Conference in Vancouver BC on May 8.