Interfor Corporation will indefinitely curtail operations at its lumber manufacturing facilities in Meldrim, Georgia, and Summerville, South Carolina, the company announced on Monday. The move is in response to ongoing weak conditions in the lumber market.
Operations will wind down by the end of the third quarter of 2024. The two sawmills produce kiln-dried Southern Yellow Pine lumber, with a combined annual capacity of 330 million board feet. The decision affects approximately 180 employees, though Interfor plans to offer work opportunities at other locations where possible.
The impact of the closures was factored into earlier temporary curtailment guidance, but the indefinite nature of the move means production may be affected beyond 2024. The company will continue monitoring market conditions to adjust its plans.
Log deliveries will stop immediately, and operations will gradually wind down, with a complete halt expected by the end of the third quarter of 2024. The combined annual capacity of these two sawmills is 330 million board feet of kiln-dried Southern Yellow Pine dimensional lumber.
Approximately 180 employees will be affected by the curtailments, although Interfor plans to provide alternative work opportunities at other company locations where possible. The production impact from these closures was initially included in temporary curtailment guidance provided earlier in August, but with these curtailments becoming indefinite, the effects on production may extend beyond 2024.
Low lumber prices are forcing sawmills to cut production on both sides of the Atlantic. In Europe, sawmill companies also face rising sawlog prices, significantly eroding their margins. Many are hoping that lumber prices in the U.S. market will rise, which will mark a new growth cycle. However, despite the construction season, U.S. lumber prices remain stagnant, and sawmill closures have not stopped the decline to post-pandemic lows.
Lumber futures fell 3% to $452.50 per thousand board feet, down 27% since mid-March. Cash prices are even lower, with Random Lengths’ framing-lumber composite price dropping to $366, the lowest since May 2020. Southern yellow pine prices also hit lows not seen since the Covid market crash, with the Southern pine composite price falling to $335 last week.
In 2023, North America’s net sawmill capacity decreased by 2%, triggered by diminishing lumber demand and past overproduction issues. This trend has led to the permanent closure of nine sawmills and reductions in shifts, particularly in British Columbia (BC) and the US South, where economic pressures have also forced mills to shut down to balance timber supplies.
Source: Interfor