Conifex Sees Lumber Market Strain Continuing Into 2027

Lumber prices weakened through the third quarter, and Conifex said volatility is likely to continue as supply adjusts. Several producers are curtailing output or reducing operating schedules; further cuts may be needed if demand recovers more slowly than expected.

The company plans to restart its two-line sawmill in Mackenzie, British Columbia, when conditions allow, including access to restart financing and sufficient log inventories. Conifex currently expects sawmill activity to resume in or about December. Its biomass power plant resumed operations this week after a scheduled annual maintenance shutdown that began in May. The temporary sawmill curtailment also began that month and was initially planned to last seven weeks.

Conifex said uncertainty could cast significant doubt on its ability to continue, but it considers it appropriate to prepare its financial statements on a going-concern basis. It has paid a cumulative US$49.4 million in U.S. softwood lumber duties since the current trade dispute began. The funds remain held in trust by the U.S. pending administrative reviews and the conclusion of appeals of U.S. decisions.

Debt reached about C$122.5 million (US$86.3 million) at the end of the third quarter, up from C$101.8 million at the end of June and C$82.6 million a year earlier. The quarterly net loss narrowed to C$7.9 million, or C$0.19 a share, from C$19.5 million, or C$0.41, a year earlier. Sales fell to C$700,000 from C$38.2 million. Conifex shipped a nominal volume of lumber, compared with 23.6 million board feet in the previous quarter and 40.1 million a year earlier; finished inventories had largely been drawn down in the previous quarter.