The latest WOOD MARKETS annual survey of the “Top 40” Canadian and U.S. softwood lumber producers featured steady production growth in 2016 due to the cooperation of a strong U.S. market, plus growth in China. Amid an absence of any major mill acquisitions, almost all of the production gains came from existing mills. Of the top forty companies, only three in Canada and four in the U.S. recorded any production declines – a sign of a good year.

These and other industry highlights were recently released in the March 2017 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 Canadian top 20 lumber companies saw their output rise from 19.6 billion bf in 2015 to 20.45 billion bf last year, while their share of national production slipped to 72% (from 74%). However, Canadian mill investments in the U.S. South are proving very strategic due to the ample timber supply in the region and high sawmilling margins (the result of low timber prices). As well, with U.S. duties being implemented on Canadian lumber shipments commencing in May, Canadian mill ownership in the U.S. is looking to be a very astute move. While there was no U.S. sawmill acquisition activity in 2016 by Canadian companies, the current collective U.S. mill count of West Fraser, Canfor and Interfor — 39 mills in all — allows their sawmill operations to enjoy excellent diversification.

Turning to the ranking of the top 20 Canadian firms, 12 were based in Western Canada and collectively produced 14.7 billion bf (52.0% of Canada’s shipments); this was higher by 390 million bf (+2.7%) than in 2015. Production for the top eight eastern Canadian producers was 5.7 billion bf (20.1% of Canada’s shipments), up 445 million bf (+8.4%) from the prior year.

The top five Canadian producers were as follows: West Fraser, Canfor, Tolko, Resolute and Western Forest Products. Of note, West Fraser surpassed Canfor as Canada’s top lumber producer — a position the former last held in 2011. Collectively, the top five raised their production to 12.3 billion bf (43.0% of Canadian lumber output), versus 12.0 billion bf (45.1%) in 2015. West Fraser inched up to lead spot, raising its output by 197 million bf (to 3.80 billion bf; +5.5%) at its 13 mills. Canfor dropped to second position with 3.79 billion bf and recorded a decline in output of 42 million bf (-1.1%). Tolko placed third, with its output falling by 63 million bf to 1.90 billion bf (-3.2%) as it cut production by half at its Quesnel, B.C. mill beginning in October 2016 (it also closed its Merritt, B.C. mill in Q1/17). Fourth-place Resolute gained 166 million bf (+9.9%) to reach a healthy 1.84 billion bf. Western Forest Products saw its output expand by 52 million bf (to 943 million bf).

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