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We continue to see China as a strong customer for the B.C. Coastal Forest Industry.
In fact, the lumber analysts are predicting that within two years, China will surpass the U.S.A. as B.C.'s largest market for softwood lumber.
I believe, this will create some excitement and concern for both the government and the forest industry in the next couple of years.
There has still not been a right sizing of the forest industry on the Coast as of yet, as we have every manufacturing facility cutting on one shift whether you are big or small or running reduced shifts throughout the month.
Along with the manufacturing facilities running at 50% or less, we have the coastal harvesting operations running at 50% and trying to export as much volume of logs as possible which leaves "fall down" from export logs available for domestic consumption. In turn, poor logs make poor lumber and log shortages are inevitable.
We have been through this cycle a few times before however, this time, there are no people to harvest our "Annual Allowable Cut" capacity and there are no workers trained to take the manufacturing facilities back to a second shift.
The question that remains to be seen is will we see large Chinese companies purchase coastal woodlands operations and manufacturing companies and then shut down facilities and export logs. This dynamic hasn't been seen on the Coast of B.C. yet.