Canfor will permanently close its Northwood pulp mill, reducing NBSK capacity by 300,000 tonnes amid weak prices and fiber shortages.
Canfor Corporation announced the permanent closure of its Northwood pulp mill in Prince George, British Columbia, effective in late fourth quarter 2026. This decision will result in an annual reduction of approximately 300,000 tonnes of Northern Bleached Softwood Kraft (NBSK) production. The closure directly impacts about 300 employees in Prince George.
The closure stems from significant and persistent challenges within the pulp and paper sector. Canfor cited a structural shift in global pulp markets as a primary reason. Substantial new pulp production capacity has emerged worldwide, leading to an oversupply and driving global pulp prices downward. Additionally, the company has faced ongoing difficulties accessing affordable fiber supply, which is a common complaint among forestry companies in the region. These combined factors have led to a prolonged period of unsustainable financial losses for Canfor Pulp, with no foreseeable improvement in the market outlook.
The closure represents a devastating blow to the forestry sector and the community of Prince George. Approximately 300 employees will lose their jobs, significantly impacting their families and local businesses that support the mill. Canfor's President and CEO, Susan Yurkovich, stated that the company is committed to supporting impacted employees through this transition. This support includes providing severance and exploring opportunities to redeploy workers to other Canfor operating locations where possible. The Northwood facility will undergo an orderly wind-down process until its permanent closure.
This closure highlights deep structural challenges facing British Columbia's (B.C.) forestry sector. The B.C. Forests Minister, Ravi Parmar, acknowledged the heartbreak for workers and the community, pointing to U.S. President Donald Trump's tariffs and duties, weak lumber prices, and the steep decline in pulp prices as contributing factors. The B.C. Council of Forest Industries (COFI) emphasized the urgent need to stabilize the sector and called on both provincial and federal governments to implement recommendations from the Forest Sector Transformation Task Force. These recommendations focus on improving access to wood and utilizing sawmill residuals. This closure follows other recent curtailments and permanent shutdowns by Canfor and other companies in B.C., underscoring a continuing trend of pulp facilities struggling amidst poor market conditions.
The permanent reduction of 300,000 tonnes of NBSK pulp capacity is a material step for Canfor to address its unprofitable operations. For Canfor, this move is part of a broader restructuring effort aimed at creating a cleaner, more focused lumber and pulp platform. However, the company remains exposed to tough pulp and lumber pricing and ongoing fiber constraints in B.C., with the possibility of further closures if conditions do not improve. The B.C. government is working to support affected workers and has proposed legislative changes to bolster access to wood fiber, including timber damaged by wildfire, insects, and windstorms.
Impact on Prices of Chemical Commodities Tracked by ChemAnalyst
The permanent shutdown removes 300,000 tonnes of annual Northern Bleached Softwood Kraft (NBSK) pulp capacity from global supply. While the closure reflects weak demand and prolonged financial losses, it will gradually tighten NBSK availability, particularly in North America. Paper and packaging manufacturers may face a more balanced pulp market if additional capacity reductions occur. However, the immediate impact will remain limited due to existing global oversupply and sluggish downstream demand.
The closure is expected to have a moderately bullish impact on Northern Bleached Softwood Kraft (NBSK) Pulp prices over the medium term as global supply contracts by 300,000 tonnes annually. However, any immediate price increase is likely to be limited by persistent oversupply and weak paper demand. Bleached Hardwood Kraft Pulp (BHKP) prices may also receive mild support if buyers shift procurement. Downstream products such as paper chemicals, starch, caustic soda, hydrogen peroxide, and sodium chlorate are unlikely to witness significant price changes, as reduced pulp production lowers raw material consumption while broader market fundamentals remain weak and supply remains adequate.
