Strengthening demand in 2025 should boost lumber prices 20%: Global Wood Summit. In related news: BC business urges new government to focus on the economy; forest unions partner to save BC forest jobs; and wood trade is not impacted by worsening relations between Canada and India. Meanwhile: Bluelinx announced Q3,2024 earnings; Weyerhaeuser received Montana Governor’s award; and Cascades announced organizational changes.
In Safety news: Canada’s Transportation Safety Board rules on 2021 fatal logging helicopter crash; and the US National Institute for Occupational Health and Safety opines on forest operations safety. In other news: ENGO says Canada’s commitment to biodiversity is at risk; the Programme for the Endorsement of Forest Certification (PEFC) touts its credentials at COP16; and Virginia Tech uses advances in AI to combat the illegal timber trade.
Finally, and just in time for Halloween, new research on ghost forests, and the oldest ever Giant Frog tadpole fossil.
Kelly McCloskey, Tree Frog Editor
Incumbent David Eby
Day two of the Global Wood Summit in Vancouver opened with a presentation by Alejandra Glazebrook from PwC (Platinum event sponsor). Glazebrook presented insights into the forest sector, highlighting its significant contributions to the Canadian economy, employing over 200,000 people and generating approximately $35 billion.
ERA Forest Products Research’s John Cooney opened day two of the Global Wood Summit in Vancouver by introducing Alejandra Glazebrook of PwC Canada, who provided an overview of global trends in forest sector profitability. Cooney followed with a detailed report on the North American lumber market and then moderated a Q&A panel with Ken Shields (Conifex Timber), Stefan Lyren (Olympic Industries), John Bal (Interfor) and Dean Garofano (Delta Forest Group). In addition to weak lumber prices—economic fibre shortages, softwood lumber duties, residual offtake challenges and lingering labour constraints—were noted as causing headaches for producers. Over 3 billion board feet of sawmill capacity closures were announced across North America in 2024, after about 2 billion board feet between 2022 and 2023. And sawmill closures are no longer just a BC phenomenon with over 1.2 billion board feet of curtailments in the historically “lower cost” US South to date in 2024.
The long awaited Global Wood Summit kicked-off in Vancouver yesterday with a detailed overview of global log and lumber trends by forest market analyst and conference co-host Russ Taylor. With due notice that “forecasters are almost always wrong”, Taylor described the long list of current and expected “fibre supply disruptors”, (including the war in Ukraine and in the Middle East), and the many negative policy initiatives, (such as the EU Deforestation Regulation and new logging restrictions in BC and Oregon), that are exacerbating the availability and supply of low-cost softwood logs world wide. Within North America, potential growth in log and lumber supply is limited to the US South, and other than beetle and wildfire killed logs in select regions, there are few other new sources of wood, said Taylor.
Zoltan van Heyningen, Executive Director, US Lumber Coalition, provided a US perspective on softwood lumber duties at the Global Wood Summit in Vancouver. Van Heyningen clarified the difference between policy-driven trade action (that can result in tariffs) and legal processes that administer US trade laws (that can result in antidumping and countervailing duties). According to van Heyningen:
B.C.’s economy is unlikely to be hit too badly by the increasingly sour relationship Canada has with the Indian government. The deterioration of relations is, however, an emotional gut-punch for many in the province’s Indo-Canadian community. Some B.C. business owners rely on trade with India, with their companies exporting products such as lumber and other products to resell. …B.C.-origin exports to India totalled $1.406 billion in 2023, down 10.6% from the year before. The Canadian and Indian governments for more than a decade had been negotiating a free-trade agreement to help both economies. …“We were getting nowhere on the free-trade agreement,” Sundher Group CEO Tom Sundher said. …Sundher’s Surrey-based company sells softwood lumber to Indian customers for furniture and frames for windows and doors and also acts as an agent in helping Weyerhaeuser. None of Sundher’s clients have changed their orders because of diplomatic tensions, he stressed.
NEW YORK — Mercer International reported third quarter 2024 Operating EBITDA of $50.5 million, an increase from $37.5 million in the same quarter of 2023 and $30.4 million in the prior quarter of 2024. In the third quarter of 2024, net loss was $17.6 million compared to a net loss of $26.0 million in the third quarter of 2023 and a net loss of $67.6 million in the second quarter of 2024, which included a non-cash impairment of $34.3 million against goodwill related to the Torgau facility. Mr. Juan Carlos Bueno, Chief Executive Officer, stated: “In the third quarter, softwood pulp markets continued to be strong and fiber costs remained stable. However, our operating results were constrained as a result of lower pulp sales volumes caused by unplanned downtime at our Peace River mill and other unexpected production events.
VANCOUVER — Canfor Pulp Products reported its third quarter of 2024 results. Overview: Q3 2024 operating loss of $209 million, includes a $211 million asset write-down and impairment charge in the pulp segment resulting from further deterioration in economic fibre availability following recent BC Interior sawmill closure announcements. After taking into consideration one-time items, Q3 2024 operating income of $2 million compared to similarly adjusted operating loss of $6 million in Q2 2024. Modest improvement in NBSK pulp unit sales realizations driven by steady North American pulp pricing through most of the third quarter and favourable timing lag in shipments, despite weak demand in China and notable increase in pulp producer inventory levels. …CPPI’s CEO, 
The US economy seems to have pulled off a remarkable and historic achievement. Gross domestic product expanded at an annualized rate of 2.8% in the third quarter, the Commerce Department said Wednesday. That’s a slightly weaker pace than the second quarter’s 3% rate and above the 2.6% rate economists projected. As the US economy continued to expand from July through September, inflation drifted lower toward the Federal Reserve’s 2% target during that same period, the report showed. Several economists tell CNN that the economy has finally pulled off an exceptionally rare achievement known as a soft landing, a scenario in which inflation is tamed without a recession. …Meanwhile, businesses continued to invest during the July-through-September period, though at a slightly softer pace than earlier in the year. Government spending at both the federal and state level also contributed to third-quarter economic growth.
ATLANTA — BlueLinx Holdings, a U.S. wholesale distributor of building products, reported financial results for the three months ended September 28, 2024. Highlights include: Net sales of $747 million; Gross profit of $126 million, gross margin of 16.8% and specialty product gross margin of 19.4%, which includes a net benefit of approximately $3.5 million related to import duties from prior periods; Net income of $16 million, and Adjusted net income of $17 million. …Shyam Reddy, President and CEO of BlueLinx… “Specialty products’ gross margins were within our expected range and structural products’ gross margins were strong. …Current market conditions remain challenging, but we believe our growth strategy will continue to position us well for an industry rebound.”
Persistent upward movement in framing lumber prices left many items approaching their highs for the year in the fourth quarter. The current supply-driven run has pushed the Random Lengths Framing Lumber Composite Price to its fourth consecutive weekly increase. The front month in lumber futures continued to trade at a slight premium to the physical market, but the January contract opened a sizable spread with cash. …Mills in the South continued to push for double-digit price hikes with moderate success. Most Southern Pine prices continued to climb. However, buyer resistance to the highest mill quotes grew more intense as the week progressed. …Coast dimension sales continued to outpace production, keeping upward pressure on some prices. Board markets remained on a divergent trend. Producers continued to adjust prices predominantly downward.
Texas forests were still relatively pristine and ancient as late as 1870, with centuries-old trees towering as high as 150 feet. But then came the “bonanza era” of widespread deforestation. By 1907, Texas became the third largest lumber producer in the United States, making lumber barons such as John Henry Kirby incredibly wealthy. In 1936 President Franklin Roosevelt established Texas’ four national forests — Sam Houston, Davy Crockett, Angelina and Sabine — in East Texas. By then, little remained of Texas’ once-mighty forests. The relentless exploitation devastated ecosystems and diminished biodiversity, leaving behind fragmented landscapes that can’t sustain the wildlife species who make their habitat in Texas forests. …And decades later, though the Forest Service says there are no old-growth forests in the national forests of Texas, we now have 400,000 acres of mature forests. …But logging of older trees continues in our national forests. [to access the full story a Houston Chronicle subscription is required]
The world is on a path to get 1.8 degrees Celsius (3.2 Fahrenheit) warmer than it is now, but could trim half a degree of that projected future heating if countries do everything they promise to fight climate change, a United Nations report said. But it still won’t be near enough to curb warming’s worst impacts such as nastier heat waves, wildfires, storms and droughts, the report said. Under every scenario but the “most optimistic” with the biggest cuts in fossil fuels burning, the chance of curbing warming so it stays within the internationally agreed-upon limit “would be virtually zero,” the United Nations Environment Programme’s annual Emissions Gap Report said. ..Instead the world is on pace to hit 3.1 degrees Celsius (5.6 degrees Fahrenheit) since pre-industrial times. But if nations somehow do all of what they promised in targets they submitted to the United Nations that warming could be limited to 2.6 degrees Celsius (4.7 degrees Fahrenheit), the report said.