Castlegar’s pulp mill will close its log yard and woodroom for August and September in response to a poor market that has claimed one of its competitors.
Mercer Celgar managing director John McKay told Vista Radio that the curtailment will begin next week and affect 21 employees.
The move is intended save money on buying additional logs because the mill does some of its own chipping and buys residual chips from sawmills locally and in the US.
It comes on the heels of Canfor’s announcement that it will close its Northwood pulp mill in Prince George, putting about 300 people out of work, as well as Domtar’s closure of its Crofton mill.
McKay said he could not rule out other downtime at the Castlegar mill.
“Depending on how the market reacts to the Northwood news, and if prices remain depressed, there’s a possibility that we would consider a curtailment at Celgar as well,” he said. “It’s not out of the question.”
Celgar had a short, non-maintenance-related shutdown a few years ago. It also asked the City of Castlegar this year for a deferral on its property tax due date, which council granted.
Although Northwood was a Celgar competitor, McKay said the closure of the Prince George mill was “very unfortunate.”
“You think about the 300 people and the families involved, and that’s your first reaction,” he said. “The second reaction is, [I’m] not super surprised based on the market.”
McKay said there were rumours in the industry that another mill would close following the Crofton announcement late last year.
Celgar faces the same poor outlook for pulp in the short to medium term, he said, but the local mill has the advantage of being closer to the US border and having access to additional fibre.
“There are a number of sawmilling and logging operations just in northern Washington state that we can take advantage of that some other folks can’t,” he said, adding Celgar is also a bit bigger than the Northwood mill, which allows them to cover additional fixed costs with volume.
But, he added, “that doesn’t mean we’re in a good spot.” The pulp industry knew that 2026 would get off to a tough start, but analysts had predicted prices to climb slowly. That hasn’t happened.
“Prices, if anything, have continued to be depressed and in some cases have gone down,” McKay said. “So that kind of prolonged, painful part makes it tough.”
McKay said his optimistic side hopes the closure of the Northwood mill will reduce some supply from the market, creating increased demand and higher prices for the remaining mills, but that was not the case when the Crofton mill closed.
