Catastrophic transportation events in the south of British Columbia and other significant supply challenges for the major producers in Western Canada are about to hit the lumber market supply channel hard. Canadian producers in the west were already facing an uphill battle with record-high stumpage costs and arriving higher U.S. softwood duties this month before a massive autumn storm hammered the province, severing most of the major highways and rail arteries. Another transportation variable developing for the U.S trucking industry is a vaccine mandate set for January 1, 2022. By some accounts, this mandate could equate to a loss of around 37% of the truckers unwilling to be mandated. At the mill level, some producers have already served notice around longer curtailments for capital improvement projects in the coming weeks as they attempt to catch up on delayed repairs and improvements. With such a burdened logistic segment and with slowing production the prospect for prompt wood this spring has just taken a serious blow. On the demand side, nothing has changed. Strong housing starts and ever-aggressive home center consumption are well in play for 2022. Buyers are usually not so emotionally invested at this time of the year, but if there was ever an argument for sound buying, and getting ahead of the market, this is the time!
2021-11-17
