B.C. Forestry Sector Outlook Appears Dismal

SEATTLE (Scrap Monster): The worldwide forestry industry's future, particularly for the British Columbia (B.C.) forest sector, appears dire due to a number of issues, such as persistent geopolitical unpredictability, China's recession, dwindling timber supply, and low lumber prices.

Western SPF prices currently average approximately US$400 per thousand board feet, which is only about one-fourth of the record high of US$1,600 per thousand board feet that was recorded in 2021, according to data published by Natural Resources Canada. It should be noted with relief that lumber prices in North America have been steadily rising since they bottomed out in July.

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Over the first seven months of this year, Canada's lumber production increased by 4.4% year over year. On the other hand, from January to July 2024, British Columbia's lumber production saw a slight decrease.

In British Columbia, the scarcity of lumber has been a serious problem. More than a dozen sawmills and pulp mills have shut down in the last four years. Also, there has been a significant shift in capital flow into the U.S. As a result, many lumber majors including Canfor and West Fraser Timber now own more mills in the U.S. than in Canada.

Furthermore, the proportion of the province's annual allowable cut (AAC) that is actually cut has significantly decreased.