Canfor Customer Update

Welcome to our latest edition of the Canfor Customer Update. Your feedback is appreciated, and helps us identify the topics that are most important to you.

Sincerely,
Wayne Guthrie


Market Update

In 2015, the lumber market reminded us how interconnected our industry is, and that we truly operate in a global market. Our lumber products travel to all corners of the world where end-users demand specific grades and sizes for a wide variety of applications.

Global currency played a major role this year by lowering the unit cost for exporters as their currency devalued against the US dollar. The result was a higher-than-normal lumber supply shift to China and the US markets. As well, North American softwood lumber production increased in both the US South and Eastern Canada to levels close to those seen in 2007. Consequently, global lumber prices were lower than forecast as excess inventories prevented any significant price appreciation in the second half of the year. 

For 2016, North American lumber prices are expected to trend higher with steady consumption in North America and inventories in offshore markets gradually returning to "normal" levels. The US housing demand is forecast to increase by 9% from 1.1 million units in 2015 (estimated) to 1.2 million units in 2016. The Repair and Remodeling market is expected to increase approximately 6% next year. Offshore markets, such as China, will experience a modest recovery following a decline in shipments from North America in 2015. Japan is expected to gain moderately with steady housing activity throughout the year.

One exciting development in our industry is in ongoing innovation. Lumber products, which are typically used in single-family residential construction, are making inroads into mid-to high-rise building structures. These projects will showcase how wood can mitigate climate change and inspire similar projects around the world to utilize wood in high rises. Read more in our “Tall Wood” article below. 

 
 
 
Although the advancements in tall wood building construction are great news for our businesses, it’s important to remember that as an industry, all of us must continue to work together to grow the demand for wood; we will all benefit from our collective efforts. 
 
As the holidays arrive and the year closes, I wish you and yours all the best for a safe and happy New Year. I sincerely appreciate your business this year and look forward to a successful 2016. 

   

 

 

 
 


Softwood Lumber Board Advances Entire Softwood Lumber Industry

The Softwood Lumber Board (SLB) has made an unprecedented impact on the softwood lumber industry through its work to promote the benefits and uses of softwood lumber products.

From increasing softwood consumption by 800 million board feet since 2012, to protecting 1 billion board feet against proposals limiting the use of wood, the SLB’s investments are clearly advancing our industry.

Of particular interest is their work to change building codes to recognize the full scope of wood products in non-residential and “tall wood” applications. With funding support from the SLB, the American Wood Council (AWC) is working to expand the allowable uses of wood in national model building standards to permit nine story mass timber construction in the 2018 International Building Standard. This year alone, the AWC has reviewed over 1,500 proposed building standard changes.

Canfor is very supportive of the SLB’s work and recently shared the SLB Impact Report on our blog in order to provide you with details on the benefits they have delivered for the industry. I hope you found this informative and welcome any questions you have.

 

 
  

 

 
 
 

The SLB is helping to change building codes to ensure wood is an option
within code for new construction.


I-Joists and Laminated Products Join Canfor Product Offering

Our recent acquisition of Anthony Forest Products Company (AFP) results in added variety of quality products such as glued laminated timber, laminated veneer lumber and I-Joists.

Glued laminated timber (Glulam) -  available as beams, columns and treated glulam, these products provide customers with the most cost-effective engineered wood solutions in floors, roofs and walls.

Laminated Veneer Lumber (LVL) -  ideally suited to carry heavy loads with minimal weight, LVL beams, headers and columns are manufactured in a controlled environment resulting in a straight, strong and uniform product.

I-Joists – made using 2x3 and 2x4 MSR lumber, these engineered joists match up with LVL and Glulam to form a complete floor system.

We are very excited about what this acquisition brings to Canfor. It expands our SYP lumber capacity, adds two wood chip plants to our operations and, most importantly, strengthens our ability to serve our valued customers.

For more information on the products that are produced by AFP operations visit www.anthonyforest.com.

 

 
 
 
 
 

Canfor's product offering has expanded to now include Glulam, LVL
and I-Joists.


Confidence in Tall Wood Construction Drives Wood Use Upward

Recent announcements have confirmed an increased confidence in Tall Wood construction, with some new projects exceeding the heights previously seen with Tall Wood structures.

The two winning proposals in the first-ever U.S. Tall Wood Building Prize Competition will result in a 12-story (130 feet) structure in Oregon, and a 10-story (120 feet) building in New York. These urban building projects will transform the skylines where mass timber such as CLT (cross-laminated timber) will be the construction material of choice. A tall wood building is typically described as 7-12 stories but the University of British Columbia announced exciting plans to construct an 18-story (174 feet) student residence, which will be the tallest wood building in the world.

Wood is known as a beautiful finishing material but also an environmentally friendly and cost-competitive building material that is a viable alternative to concrete and steel. These recent announcements are very positive for our industry and we look forward to the future of Tall Wood buildings continuing its upward trend.

 

  
 

This 18-story Tall Wood student residence will exceed heights previously
seen with tall wood structures.

China Update

The fourth quarter of 2015 brought a modest recovery in China’s lumber market, following the significant decrease in demand that took place in the third quarter. 

Following China’s decreased demand last quarter, North American suppliers reduced their exports to China over the last few months, which helped to deplete lumber inventory at China’s major importing ports. 

We're now seeing strong demand for low grade lumber as well as with high grades. Other external factors that support the recovery include a 16% change in value of the Russian Ruble versus the Chinese Yuan since August, which has facilitated recent sales activity. Also, the Bank of China cut the lending rate to 4.35% in an attempt to further stimulate the economy. With this recovery, North American exports to China are returning to normal levels, albeit slowly, and are accompanied by a steady price appreciation. 

 

 

Expanding our Boundaries to    Southeast Asia

Canfor took a significant step in growing our presence in Southeast Asia with our first order to Indonesia. We are excited about our expansion into this country that is the second-largest southeast market with a population exceeding 248 million.

The Southeast Asian market is looking for other options over tropical hardwoods since the rainforest supply is decreasing and resulting in higher hardwood prices. Both our SYP and SPF products are good supplements to the inevitable lumber shortage and we expect our volumes to increase. 

While hardwood currently still dominates in this market, we look forward to raising the awareness of Canfor’s products in Southeast Asia and becoming a popular alternative to increasingly less attainable hardwoods.