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October 28, 2017 1:38 am

Conifex To Upgrade El Dorado Mill Before Mackenzie

Monday, November 9, 2015 @ 11:27 AM

Prince George, B.C.- Conifex has  made its decision , and the El Dorado  sawmill  in the Southern US will  be upgraded first.

Conifex  had been assessing both its idled Mackenzie Site One sawmill and its  recently purchased  El Dorado facility in Arkansas as to  which facility would be at the  top of the priority list  for upgrades.

“We are doing the US  first and Mackenzie second  but it is not  because of any  local dissatisfaction” says  Conifex CEO and President  Ken Shields, it  has more to do with  plain dollars and cents.

Shields says while the two projects are “pretty similar”  there  is one  striking difference, and that is  the  selling price of the product .  “It costs roughly the same to produce a thousand board feet in  B.C. as it does in the Southern U.S.” says Shields,  “But the selling price is $400 dollars in the U.S. and $270 dollars in B.C.”

Timber supply  is not  an issue  as the Mackenzie  fibre supply is healthy,   but Shields says the uncertainty over  what will be  in the renegotiated softwood lumber agreement is another factor that tipped the scales in favour of  upgrading the El Dorado facility first.

Shields says upgrading the Mackenzie Site 1 mill   will still happen,  it just  won’t  be the first on the  capital plan list.  “So with the  huge  spurt  in prices in the US and  our Canadian Prices haven’t kept pace because China has been weak”.  He says  the decison to  go with  El Dorado  first,  is  “more based on factors that are outside the control of British Columbians, in the sense the prices  are better in the US and there’s no uncertainty due to the Softwood lumber agreement.”


Tough choices to make, hmmmm. The cost of our home grown companies going international. Well, at least expedite #1.

Considering that Canadian Lumber is sold in US dollars at the US price his statements don’t make any sense. Furthermore it is the US price for lumber that determines the market, not what is sold to China.

You have to understand the market – in US dollars:
WSPF is hovering 270.00 (268) for 2×4 per 1000
SYP and ESPF is between 375.00 and 390.00 for 2×4 per 1000.

slinky, do you know why that is the case? Is the WSPF seen as an inferior product in the market?

Western over Eastern, think the reasoning is western grows faster so the rings are further apart and thus “weaker” than eastern spruce, pine and fir. Southern yellow pine is what they cut at the El Dorado mill I do believe. SYP is well known in the states as the best framing wood

Or it could simply be the west has more advanced mills that put out a lot more board feet and have a larger supply of timber.

WSPF has been sold in the US for the past 50/75 years for framing etc;

It does a good job and has been the mainstay of the Canadian (BC) lumber market.

Not sure why anyone would pay more for SYP or ESPF for framing if it was not necessary. Canadian lumber is sold at the NY price minus freight. So perhaps the savings are in the transportation costs, however I kind of doubt it.

This is the first time in approx. 50 years I have ever heard this argument. I think it has more to do with the costs assoctiated with timber, and labour in the US versus BC.

Perhaps someone out there in Lumberland can give us a better understanding of the market.

I believe a lot of SYP framing lumber is (has to be) pressure treated lumber, destined for sale in the warmer and more humid areas of the US where non-treated lumber would be subject to termite attack. That may be one reason for the substantial price difference between it and untreated SPF from Canada.

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