Sanctions and rising costs are making lumber production unprofitable in Northwest Russia. In related news: North American lumber prices are falling; the housing market may follow; Canada’s market is rebalancing; and Australia’s building industry is in crisis. In other Business news: West Fraser buys-back $1.1 billion of its shareholder’s stock; Catalyst Crofton gets parliamentary secretary visit; and Wawa OSB hopes to reopen its Ontario plant in 2023.
In other news: Canada announces Nature Advisory Committee and funding for Trees of Life; the Federation of BC Woodlots releases its program report; PEFC appoints new CEO Michael Berger; the Society of American Foresters partners with #forestsproud; and the Montreal Wood Convention celebrates a successful wood promotion event.
Finally, as home-building costs rise, a Phoenix company uses foam to build houses.
Kelly McCloskey, Tree Frog Editor
VANCOUVER, BC – West Fraser Timber announced that it has taken up and purchased for cancellation a total of 11,898,205 common shares at a price of US$95 per share for an aggregate purchase price of US$1.13 billion. The Shares purchased represent approximately 11.7% of the total number of West Fraser’s issued and outstanding shares. After giving effect to the SIB, West Fraser will have 87,473,547 Shares and 2,281,478 Class B shares issued and outstanding. …“The fact that the tender offer was not oversubscribed suggests that many of our shareholders still see considerable upside value in our shares,” said Ray Ferris, President & CEO. “West Fraser’s capital allocation priorities aim to balance disciplined investing with returning capital to shareholders, all while maintaining our financial flexibility. …Since the completion of the Norbord acquisition in February 2021, the Company has repurchased 33,542,183 Shares… representing approximately 27.2% of the total shares outstanding at the time.
WASHINGTON, DC—The Society of American Foresters (SAF) and 
The decline in export volumes due to EU sanctions against the backdrop of rising transportation tariffs and a stronger ruble made the production of lumber unprofitable in the Russian North-West. In April 2022, the volume of lumber imports to China fell by 20.1% y-o-y, to 2.2 million m3. Including supplies from Russia decreased by 11% to 1.04 million m3. The decline in lumber imports was due to lockdowns in ports in China due to quarantine, as well as a downturn in the country’s construction industry. …The Russian domestic market will not be able to absorb the volumes released from exports. …“There is nowhere to send the lumber,” says Valery Pisarev. … Exports of lumber to Europe, the main market for sawmills in the Northwest of Russia, will end on July 9, when the grace period for deliveries under contracts concluded.
The wind is definitely shifting—and becoming a lot chillier—for Canada’s housing market. Toronto, Vancouver, Montreal, Ottawa and Hamilton were among the areas experiencing significant pullbacks in home resale activity in May. For many of them this represented the third-straight month of decline. Clearly the Bank of Canada’s interest rate hikes since March—and the prospects for more in the months ahead—are changing the game in a big way. They’re considerably raising the bar for buyers, and dragging down earlier (super) bullish sentiment in the process. With demand softening, inventories are now on the rise in some markets. This is quickly easing what were extremely tight demand-supply conditions just a few months ago. In fact, most major markets in Canada have returned to balanced territory in May based on sales and new listings reported by local real estate boards.
Consumers will likely see cheaper lumber this summer but shouldn’t expect prepandemic prices, as many retailers will still have leftover stock purchased at higher prices and producers are avoiding flooding the market. Wholesale lumber prices began dropping in mid-March and then plunged 40 per cent over the past three weeks, yet industry analysts and retailers say it could take four to six weeks before consumers notice any significant markdown in retail prices. The general availability of lumber has vastly improved as demand for do-it-yourself projects falters while supply bottlenecks are cleared. The regional shortages that were seen during the lumber mania a year ago are no longer common. But many sawmills are scaling back production, so don’t expect a glut on the market this summer, wood experts say. [to access the full story a Globe & Mail subscription is required]
Lumber prices and supply have taken investors, contractors, and consumers for a ride since 2020. Erratic inventory and construction labor shortages combined with a Canadian lumber tariff have spiked lumber prices as the nation’s appetite for new housing remains high. Lumber is crucial as 9 out of 10 new single-family homes built in the U.S. are wood-framed, said the NAHB. …Contributing factors include “high demand in the housing market, bottlenecks in the supply chain, and labor shortages,” said Jonathan Paine, CEO of the National Lumber Building Material Dealers Association. …Nine out of 10 new single-family homes built in the U.S. are wood-framed, the NAHB estimates, so savings from lower lumber prices could reach consumers. But some experts believe that President Biden will have to take action to improve the country’s housing supply and lower prices on homes and materials, including lumber.
OTTAWA, ON
OTTAWA, ON
The village of Zeballos on the northwest coast of Vancouver Island is one of several B.C. communities struggling to maintain its volunteer fire department as wildfire season approaches. Last week, fire service in Zeballos was temporarily suspended with no date for it to resume. Mayor Julie Colborne told residents that while they can still call 911 to report a fire to a dispatch service, there will be “no response to a fire callout.” She advised residents to contact their insurance provider as [this] may affect their coverage. …the village hasn’t been able to find a fire chief for some time …towns with shrinking populations face issues with recruitment, and have a hard time paying for fire equipment. A limited tax base makes it difficult to buy fire trucks and maintain a firehall. …Emergency Management B.C. said the government is “aware of the challenges facing rural fire departments.”
VICTORIA, BC – The West Coast is on track for a cold, wet June. Officials say the silver lining is a low fire hazard for the early summer. However, the province noted there are several areas experiencing drier-than-normal patterns, including southern Cariboo, Thompson-Okanagan and Rocky Mountain Trench. Officials plan to monitor these areas as the longer-range forecast indicates a shift to above seasonal temperatures for late July and August, which may bring an increased wildfire hazard. To support wildfire prevention, preparedness and resilient communities, Budget 2022 provided $359 million in new funding to protect British Columbians from wildfires. [Related coverage includes]:
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Planting the right trees, in the right places… can support goals like addressing climate change and improving lives. However, new research by Matthew Fagan, University of Maryland Baltimore County, finds that some trees planted in the tropics may be doing more harm than good. The study examined the increase in tree cover across the global tropics between 2000 and 2012. They found that, surprisingly, tree cover gains during that period were equally attributable to natural forest regrowth and the creation of tree plantations. …Tree plantations are not always harmful to the environment, and even much-maligned oil palm can be farmed sustainably, Fagan explains. However, the study found that 92 percent of new tree plantations were in biodiversity hotspots, threatening a range of plant and animal species. …he notes, forests are not the only ecosystems that can help mitigate climate change and biodiversity loss. Savannas and prairies are important too.
ARIZONA — The U.S. Department of Agriculture released a list of grants to test innovative ways to save the forest and forested communities by making use of the small trees and biomass that have so far stymied restoration efforts. The $44 million list of projects nationally includes $1.75 million worth of projects in Congressional District 2, in part thanks to lobbying efforts by Rep. Tom O’Halleran. …The U.S. Department Agriculture announced the national list of projects to create products from the biomass generated by forest thinning and restoration projects. The wood scraps, saplings, small trees, brush and downed wood makes up about half of the material removed in a forest restoration project in the ponderosa pine forests. However, timber companies can’t make enough money on the larger trees to cover the cost of removing the biomass, which has stalled the Four Forest Restoration Initiative for a decade.