Lebel Cuts 25% Production (200 MMBF): SPF Supply Tightens

Impact on Your Procurement Strategy

The announcement by Groupe Lebel that it will reduce sawmill production by approximately 25% starting in January 2026 is the most significant supply-side signal the dimensional lumber market has seen entering the new year. This cut, representing about 200 million board feet (MMBF) of output, is a direct market reaction to unsustainable pressures facing Canadian producers.

Immediate impact focuses on Western SPF and Eastern Canadian supply chains. The primary driver cited—high export duties and tariffs approaching 45%—means that even marginally weak US demand is enough to tip the cost-benefit analysis toward curtailment. For procurement managers, this eliminates the expectation of deep Q1 discounts based purely on softening demand. Historically, large, announced curtailments act as a psychological and physical price floor. We anticipate a reactionary rally or at least a firm stabilization in SPF pricing (dimensional 2x4s and 2x6s) through January, as distributors who were running lean inventories must now compete for a smaller pool of available wood. Buyers should expect pricing pressure to shift from flat/down to firmly stable or slightly up through the first quarter.

This production cut directly impacts supply availability and lead times, particularly for distributors in the Northeast and Midwest who rely heavily on Canadian imports. While the full 200 MMBF reduction won't hit shipping flows until mid-January, it removes flexibility from the supply chain immediately. Lead times for high-grade SPF and specific lengths (e.g., 16-foot material) may extend by 1 to 2 weeks. This necessitates proactive purchasing, shifting the focus from price discovery to supply assurance.

The strategic implication is that the market is now less sensitive to weak housing starts data, as capacity is being actively managed downward. If US housing demand or R&R activity improves even moderately in Q1, the reduced capacity will be unable to respond quickly, leading to rapid price appreciation. Buyers should use December to solidify their January and early February volume requirements, focusing on securing supply now rather than waiting for a potential price dip that the 25% cut makes highly unlikely. This is a clear indicator that the high cost of trade policy is forcing mills to rationalize production ahead of any fundamental demand recovery.

Key Takeaways

• Assess Q1 SPF inventory needs immediately and consider booking 30-45 days of forward volume before the 25% curtailment officially impacts shipping flows in mid-January.

• Recognize that the 200 MMBF cut establishes a firm price floor, limiting downside risk; focus on securing supply rather than waiting for deeper price drops.

• Monitor Q1 housing data; if starts improve even marginally, expect a rapid price spike as reduced Canadian capacity cannot quickly meet increased US demand.

Market Outlook

Pricing Trend: UP

Confidence Level: MEDIUM

Recommended Action: Secure critical dimensional SPF volume (2x4, 2x6) for January/February delivery before Jan 5th.

How LumberFlow Helps

Use LumberFlow's multi-supplier RFQ system to compare pricing across your supplier network and confirm availability before the capacity reduction tightens the market. Track immediate price shifts using LumberFlow's automated price alerts to react quickly if other mills announce similar curtailments in early January.

Ready to stay ahead of market trends? Book a consultation with our team to see how LumberFlow's procurement platform transforms dimensional lumber buying.