Domtar Cuts 150 Million BF: Supply Tightening in Q1

Impact on Your Procurement Strategy

Domtar’s announcement to slash 150 million board feet of production across its North American footprint is a significant supply-side intervention that buyers cannot ignore. While the quantitative forecast suggests a modest 1.4% price increase over the next 7 days, this news provides the fundamental justification for that upward movement. The reduction is spread across Quebec, Ontario, and the US, but the most acute impact will be felt in the Great Lakes region following the indefinite shutdown of the Resolute sawmill in Ignace, Ontario, scheduled for March 12 .

This move is a direct response to a "triple threat" facing producers: stubbornly weak North American demand, the mounting pressure of US tariffs , and broader economic volatility. For procurement managers, this signals that the industry is entering a phase of aggressive capacity rationalization. When major players like Domtar/Resolute voluntarily park 150 million board feet of capacity, they are effectively setting a price floor. They are signaling that they would rather leave logs in the bush than sell finished lumber at current market levels.

The divergence between the "weak demand" cited by CEO Luc Thériault and the UP forecast direction is a classic market timing trap. While macro demand indicators might be sluggish, the sudden withdrawal of supply can create localized shortages and price spikes. Buyers in the Midwest and Northeast who rely on Ontario/Quebec SPF should expect lead times to extend beyond the current 2-3 week window as the March 12 deadline approaches.

Strategic buyers should look past the current "weak demand" narrative and recognize that the supply-side is tightening faster than the demand-side is softening. The 0.67 confidence in the price forecast reflects a market that is searching for a bottom; Domtar may have just provided it. We recommend securing Q1 and early Q2 framing lumber requirements immediately, particularly for 2x4 and 2x6 SPF dimensions that are most susceptible to these production cuts. Waiting until March to fill inventory gaps could result in paying a significant premium as the Ignace closure becomes a reality.

Key Takeaways

• Anticipate tighter supply for Ontario/Quebec SPF and US framing lumber as 150 million board feet exits the market in Q1.

• The March 12 shutdown of the Ignace mill will disrupt regional supply chains; secure alternative sources for Great Lakes projects now.

• ML forecast predicts a 1.4% price rise this week; treat this news as a signal that the price floor has been established by mill discipline.

Market Outlook

Pricing Trend: UP

Confidence Level: HIGH

Recommended Action: Lock in Q1 framing lumber needs before the March 12 Ignace mill shutdown. With 150 million board feet leaving the market, expect the current 1.4% price uptick to accelerate as regional supply narrows.

How LumberFlow Helps

Use LumberFlow's multi-supplier RFQ system to identify which vendors still have on-the-ground inventory from Domtar facilities. Monitor our automated price alerts to catch the first signs of the 1.4% projected increase hitting the spot market.

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