Canfor Pulp Products Inc T.CFX

fibre availability

[kboorman]

Canfor just announced shutting down polar sawmill in Bear Lake BC citing poor fibre availability.. Only gonna get worse as the annual allowable cut is reduced even more in British Columbia. Pre 2015 the AAC was 80 million m^3. It is expected to decline to 55 million m^3 by 2030

"[...] The curtailment is the result of a shortage of economically available fibre in the region and is expected to be in place for a period of approximately six months. The Company will continue to evaluate market conditions and fibre availability in the region and adjust operations accordingly."

""Unfortunately, BC is amongst the highest cost operating jurisdictions in the world. With persistent weak market conditions and a shortage of cost-competitive fibre in the region, we simply don't have enough economic fibre to support both of our Prince George-area mills through this winter. As a result, we are making the difficult decision to curtail operations at Polar to ensure continued operations at our other facilities in the region," said Stephen Mackie, Executive Vice President, North American Operations."

[OmahaValue]

Seems odd that canfor doesn't have enough fibre after closing down so many sawmills - Isle Pierre, Mackenzie, Chetwynd, Clearwater, Houston (temporarily).   Where did all the fibre tied to those mills go? I get the sense this might be more about low lumber prices than fibre accessibility.  That said, the Provincial Government needs to do a better job supporting the Forest

[kboorman]

All of the beetle kill fibre is gone, decades / a century of forestry mismanagement have led to this point, and now the AAC needs to be reduced a lot. It likely isn't coming back for what might as well be a lifetime. What would help is if a bunch of other BC sawmills and pulp mills shut down permanently

[OmahaValue]

https://ckpgtoday.ca/2023/11/16/rustad-reacts-to-polar-sawmill-curtailment/ It also sounds like the Province is sitting on its hands when it comes to approving logging permits.  Canfor is basically telling the province you have 6-months to figure out how to release fibre or another samwill is going down permenantly. Regardless of Polar, there should be enough fibre from the remaining

[kboorman]

If you are looking for a vaguely similar situation re: selling to indigenous. A couple years back Clearwater sold to a JV between Premium Brands and several different Mi'kmaq groups, with the indigenous buyers having an option to buy 100% of the company. Here's a pretty lengthy national post article if you are interested in further reading: https://nationalpost.com/news/canada/john

[Possibleidiot01]

A factor as well here , could be the biomass industry?

[kboorman]

Old post, but in relation to this post I made in November West Fraser is now partnering more with Indigenous peoples in regards to fibre supply, will more of this come and will it result in a more secure supply of fibre? https://www.biv.com/news/resources-agriculture/bcs-west-fraser-timber-lake-babine-first-nation-combine-tenure-8570785

[kboorman]

West Fraser announced yesterday it is permanently closing it's Fraser Lake sawmill in BC due to a lack of fibre in the region

[OmahaValue]

I wonder if this improves fibre availability and costs for the Canfor sawmills in the region?  

[kboorman]

"Duties are set to rise in 2024 and 2025 based on the DoC's annual review process. We had assumed 2024 duties would tick up to 10%, looks like the preliminary assessment is 13.86% on average. 2025's assessments will be even higher as the reference period will be for 2023, when lumber prices were even lower and many Canadian mills producing at or below cash costs due to weak market