Lumber prices and OSB prices remain under pressure – According to Random Lengths, the Framing Lumber Composite decreased $107 w/w to $794, making for a two-week drop of $167 (-17.4%), while in OSB markets, the OSB Composite decreased by $67 w/w to $753 (-13.0% over two weeks). The Framing Lumber Composite and OSB Composite are now down 40.5% and 47.4%, respectively, since March 11. For next week, RBC Elements forecasts that the RL Framing Lumber Composite will decrease $95 w/w to $699 and that the RL OSB Composite will decrease $28 w/w to $725.

Canfor announces reduced operating schedules at Western Canadian sawmills. The company announced on May 26 that due to ongoing supply chain challenges, it will continue to have reduced operating schedules at its Western Canadian sawmills. Management noted its ability to transport its products to customers remains challenged and that its inventory levels remain very high. The company has been operating at approximately 80% of production capacity since late March 2022, and will implement two weeks of rotating downtime across its primary sawmills in July and August to help align production capacity with sustainable timber supply and transportation availability. These capacity reductions are expected to result in an incremental impact of approximately 275 mmfbm by the end of August, in addition to the 100 mmfbm reduction announced on March 30. We view the announcement as being directionally consistent with the company’s statement with its Q122 results that it would “closely monitor the supply chain situation and will adjust future lumber operating schedules, as appropriate, through the balance of the second quarter and into latter half of 2022.”

International Paper increasing fluff pulp prices. According to RISI, the company informed its North American and European customers that it would increase its fluff pulp list prices by $80/tonne on July 1, with prices in China increasing by a net $50/tonne. The July price increase follows $50-80/tonne global fluff pulp price increases on May and June allotments, and is the seventh price increase for fluff pulp the company has announced this year.

Carpenters Union strike in Ontario ends. The Carpenters District Council of Ontario announced on May 25 that it had reached a tentative agreement with various employer bargaining agencies in the province of Ontario, ending the strike by its members in the Industrial Commercial Institutional (ICI) sector that began on May 9. Other sectors, including residential and maintenance, were unaffected by the strike, having already ratified collective agreements for their respective sectors.