Interfor BC Mill Shut Down; 45% Tariff Squeezes SPF Supply

Impact on Your Procurement Strategy

The indefinite shutdown of Interfor’s Grand Forks, BC, sawmill is a classic supply-side reaction to overwhelming cost pressure and weak current demand. While the volume reduction from a single mill won't instantly clear the market surplus, the underlying cause—a reported increase in the US softwood lumber duty to 45%—is a critical, immediate concern for procurement managers.

This 10-percentage point jump in duties significantly raises the cost floor for all imported Canadian dimensional lumber (primarily SPF and Hem-Fir). Assuming an average FOB mill price of $450/MBF, the duty increase alone adds approximately $45/MBF to the landed cost, pushing the total duty cost to around $200/MBF. This makes Canadian lumber dramatically less competitive against US Southern Yellow Pine (SYP) and domestic SPF, even in traditionally strong import regions like the Northeast and Midwest. Buyers should recognize that even if spot market prices remain soft in the short term (due to current weak housing starts), the replacement cost for Q1 2026 inventory will be substantially higher. We anticipate increased price volatility as remaining Canadian mills adjust production schedules and US producers gain pricing power due to reduced import competition.

The immediate supply impact focuses on Western SPF products, particularly studs and construction-grade 2x4s and 2x6s. Distributors relying on just-in-time (JIT) inventory strategies for these items face elevated risk. While the shutdown is labeled 'indefinite' rather than 'permanent,' the financial threshold required for Interfor to restart operations—needing both stronger market prices and relief from the 45% duty—is high. The risk of further Western Canadian capacity curtailments is significant, tightening overall North American lumber supply and potentially extending lead times for rail-shipped goods by 2 to 3 weeks through the end of Q4.

For buyers, the timing decision is nuanced: the current market weakness offers favorable pricing, but the underlying cost structure is rising rapidly due to policy. The strategic move is to secure necessary SPF volumes now, utilizing current favorable pricing before the 45% duty fully translates into higher contract and spot quotes. Use the Interfor closure as confirmation that trade policy risk is actively translating into supply constraint, necessitating a shift toward risk mitigation over waiting for a bottom that may be artificially inflated by tariffs.

Key Takeaways

• Secure immediate Q4 SPF needs now. The reported duty increase to 45% adds significant cost pressure and reduces the risk of further spot price declines.

• Expect the high tariff to establish a higher price floor for US domestic lumber (SYP/SPF) as Canadian imports become functionally more expensive and less available.

• Review sourcing strategies; the 45% duty necessitates exploring increased domestic SPF/SYP contracts to mitigate trade policy risk moving into 2026.

Market Outlook

Pricing Trend: UP Confidence Level: MEDIUM Recommended Action: Lock in immediate SPF needs (studs, 2x4s) now, focusing on Western Canadian stock. Use the current market weakness as a buying opportunity before the 45% tariff fully impacts replacement costs and triggers broader price increases.

How LumberFlow Helps

The volatility caused by the 45% duty makes cost comparison critical. Use LumberFlow’s Quote Comparison Dashboard to instantly evaluate landed costs, including duty estimates, across multiple domestic and international suppliers. Our platform helps identify the most cost-effective solution before the tariff shock hits your margin.

Ready to stay ahead of market trends? Book a consultation with our team to see how LumberFlow's procurement platform transforms dimensional lumber buying.