Canadian lumbermen expand US mills as US demand soars
CANADIAN lumber companies plan to ramp up production by expanding existing mills as strong home construction fuels the need for more wood, reports Bloomberg
16 May 2021 - 19:00
Vancouver's West Fraser Timber Co, the world's biggest lumber producer, plans to expand capacity at five of its lumber mills in the US South. Interfor Corp is rebuilding a sawmill in Georgia that is on track for completion by the end of 2021. Both companies expect home-building and renovation demand to continue supporting strong prices for wood products in the near future, said the report.
The pandemic-fueled surge in home construction last year took North American sawmills by surprise, sending lumber prices to new records. US futures this week hit $1,600 per 1,000 board feet for the first time, a four-fold increase from a year ago. While production has since ramped up, demand continues to outpace supply.
The expansions will be primarily in the southern US, where there is an abundance of planted timber available to be harvested. They should help to increase overall inventories in the country and push prices off their record highs over time. But that won't come fast enough to alleviate supply constraints during the peak building season.
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