West Fraser expects housing affordability challenges, mortgage rates, inflation, tariffs and consumer confidence to continue influencing demand for wood building products in 2026 while maintaining its shipment outlook. The company reported improved market conditions across most business segments during the second quarter, with stronger European markets and continued operational improvements in North America.

Demand for North American lumber products is expected to remain stable in 2026 despite continued pressure on residential construction. The company reiterated its spruce-pine-fir and southern yellow pine shipment target of 2.4 billion to 2.7 billion board feet, reflecting the impact of 2025 sawmill closures together with reliability improvements and capital projects across its lumber mill network, including the continued ramp-up of its modernized Henderson, Texas, sawmill.

The Henderson mill more than doubled production from the first quarter and is now operating at output levels comparable with the mill it replaced. Across U.S. lumber operations, the company reported continued productivity and reliability gains. Southern yellow pine lumber production during the first half of 2026 was similar to the year-earlier period despite the closure of the Augusta sawmill in the fourth quarter of 2025. In Canada, lumber production increased 13% in the second quarter as the Blue Ridge sawmill returned to normal operating rates.

West Fraser expects somewhat softer demand for North American oriented strand board (OSB) during 2026 and maintained its shipment target of 5.9 billion to 6.3 billion square feet, based on a 3/8-inch thickness. The outlook reflects housing affordability challenges, potential trade tariffs and the completed closure of the High Level, Alberta, OSB mill, which concentrates production at newer and more efficient facilities.

In Europe, the company expects demand for medium-density fiberboard, particleboard and OSB to remain stable or improve modestly from 2025 levels. It maintained its European OSB shipment target of 1.0 billion to 1.25 billion square feet, based on a 3/8-inch thickness, while continuing to monitor macroeconomic conditions and geopolitical developments.

The company said improvements in U.S. housing affordability from expected easing inflation, lower interest rates and government policy changes could support residential construction over the medium term. It also expects long-term demand growth from wider adoption of mass timber in commercial and industrial construction and continued repair and renovation activity driven by the aging U.S. housing stock.

West Fraser said near-term demand remains exposed to mortgage rates, housing affordability, consumer confidence, tariffs and broader economic conditions. The company also reported that higher oil-based input costs increased resin and wax expenses by about $13 million in the second quarter from the previous quarter, while higher transportation costs in the U.S. South were largely offset through customer surcharges.

Based on its current outlook and assuming stable market demand conditions, West Fraser expects 2026 capital expenditures of $300 million to $350 million.