Canada Sawmill Shipments Drop 3.4% as Mill Stocks Rise

Impact on Your Procurement Strategy

StatCan data shows a gap between production and consumption. Canadian sawmills increased output by 1.7% in February to 3,430,400 m3, but shipments stalled. While overall production is 7.0% lower than 2025, the monthly increase suggests producers are ramping up despite low buyer urgency. This buildup of un-shipped material (3,286,100 m3) indicates supply tightness is easing. Lead times for Western SPF and other species may shorten soon as mills try to move wood.

Demand indicators suggest caution. Shipments fell 3.4% from January, meaning US building material distributors aren't absorbing current production levels. With shipments down 4.2% year-over-year, the 2026 spring demand surge looks muted. The mismatch between the 3.43 million m3 produced and the volume leaving yards suggests distributor inventory is sufficient for current projects. A sustained price rally is unlikely in the immediate future.

Prices recently moved 1.5% higher, but internal signals suggest they have hit a ceiling. We expect a 1.4% price correction because mill surpluses usually lead to price concessions. Buyers should shift to a replacement-buying strategy and avoid speculative volume. Current prices are 6.3% above medium-term averages, so the risk of overpaying is higher than the risk of a shortage.

By the end of Q2 2026, the market will likely undergo price discovery as the February surplus is negotiated. If housing starts don't rise by June, mills will face more pressure to discount. Maintain a 14-day inventory position to stay agile and capitalize on price softening expected by the second week of May.

Key Takeaways

• Shift to replacement buying as shipments fell 3.4%, signaling a surplus at the producer level.

• Expect a 1.4% price correction by mid-May 2026 as mills move the 144,300 m3 surplus from February.

• Keep inventory levels at 14 days to hedge against prices that are currently 6.3% above the 12-week moving average.

Market Outlook

Pricing Trend: DOWN

Confidence Level: MEDIUM

Recommended Action: Cap inventory at a 14-day supply and defer large buys until the second week of May. This timing allows you to capitalize on the 1.4% price correction triggered by rising mill stocks.

How LumberFlow Helps

Use the weekly price forecast to find the floor for SPF and framing lumber before committing to Q2 volumes. Validate these trends using daily market insights and the sentiment analysis in the LumberFlow workflow to avoid buying into an overextended 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.