Lumber Companies Announced Major Capacity Expansion Plans

SEATTLE (Scrap Monster): The recent surge in home construction following the pandemic has led to notable surge in lumber prices. The soaring lumber prices resulted in several North American lumber companies embarking on capacity expansion projects, in a bid to meet the rising demand situation.

According to industry sources, the U.S. lumber futures, for the time in its history, surpassed levels of $1,600 per thousand board feet. The lumber prices have surged higher by almost four-folds when compared with the year-ago levels. Although many mills have reported significant ramp-up in production, the supply continues to remain inadequate to meet demand.

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Several lumber majors including West Fraser Timber Company and Interfor announced capital investment to expand their existing facilities. For instance, West Fraser recently announced investment of approximately $150 million at five of its U.S. lumber mills. In addition, it has also decided to increase the number of shifts at several of its mill facilities. Also, the rebuild project underway at Interfor’s Georgia mill is slated for end-2021 completion.

The above expansion plans are likely to alleviate supply constraints only in the medium-to-longer term.