A few days ago, West Fraser announced the company's capacity adjustment plan in the third quarter. The company adjusted the available capacity of its BC SPF in Canada, SYP in the southern United States, and OSB in North America and Canadian plywood plants. The adjustments have been accumulated in the past two months. Reduce production capacity by 5% to 10%.
Prior to August, both Conifex and Canfor announced plans to reduce their production capacity in the third quarter. One of the important factors was the decrease in orders in the third quarter. Due to the traditional off-season and the previous increase in raw material prices, orders for forest products slowed down in the third quarter.
In addition, the wildfires in Canada's B.C province in the summer are more serious, as well as the interruption of transportation services caused by the wildfires and the current overall high inventory level. In terms of OSB boards and plywood, it is more because the supply of resin used in the production of panel products is restricted, which in turn leads to a decline in factory production capacity.
According to information released by West Fraser, it is expected that the operation rate of the factory will continue to decrease during the remainder of the third quarter. The specific reduction level depends on the company’s inventory level, economic log supply status, fire, and other weather conditions, and COVID-19. Many factors such as the supply of labor, the availability of raw materials and transportation resources, and the needs of customers are caused by the continuous impact.
