Great. Thanks, Steve.
So let me start off our outlook section by touching on third quarter seasonality. Typical third quarters can be challenging operationally as hot, dry weather can restrict logging activity, reducing harvest volumes and impacting costs. At the end of the second quarter of this year, both our timberlands and mills took downtime due to excessive heat.
While our mills returned to regular operations in early July, our harvesting activities continue to be impacted by earlier than normal hot and dry conditions.
While we've not experienced any significant forest fires in our areas of operation, the combination of hotter and drier conditions, combined with potential harvest permit delays may impact near-term log availability and could result in operational downtime. We'll continue to monitor the situation as we move forward and adapt operations as necessary.
As we look to our markets, despite strong demand from the new home construction segment in North America, commodity lumber prices have declined from the record levels reached in May.
As COVID restrictions were relaxed and people began to travel, there was less demand for lumber from the do-it-yourself segment. The decline in activity has caused the supply and demand for lumber to rebalance. In the past couple of weeks, our customers have indicated that demand from the DIY segment appears to be improving, which along with the recent supply curtailments due to extreme fire conditions could support the market in the near-term. But as we wait for the North American commodity market to stabilize, we've been redirecting lumber back into the export markets, where inventory levels are low and pricing is improved. We began this process late in the second quarter, increasing shipments into Japan and we expect to continue to do this through the third and fourth quarters. We've attempted to mitigate Asian market logistics challenges by reintroducing the use of break bulk carriers to deliver some of our products to market.
As we look forward, we will continue to leverage our flexible operating platform to match production to market demand and logistics capacity. In our log business, we expect domestic saw log prices to remain elevated due to limited supply and pulp log prices to remain stable. Longer-term, we believe the combination of low mortgage rates and aging U.S. housing stock and years of under building, work from home and growth in the use of mass timber construction will support increased demand for our products. All this while supply remains relatively constrained due to the effects of the Mountain Pine Beetle in British Columbia.
Going forward, the new demand supply dynamic should support elevated product pricing over recent trend levels.
Turning to capital allocation, we remain committed to a balanced approach to capital allocation, returning cash to shareholders while maintaining the flexibility to support growth initiatives.
Our balanced capital allocation approach includes paying a regular quarterly dividend, investing strategic and discretionary capital in our mills or through acquisitions that will grow long-term shareholder value and returning any excess capital to shareholders.
We continue to make progress on the $10 million in strategic capital projects currently underway. These projects are focused on reducing costs and improving efficiency. We're also looking at some larger projects in our existing facilities that will further improve competitiveness by reducing costs, improving recovery and enhancing value extraction. Overall, we plan to remain balanced and discipline in our approach to capital allocation. And as you've seen, we've announced the renewal of our NCIB that provides us the opportunity to purchase up to 10% of our public float for cancellation over the next year.
Turning to what's next.
Our top priority remains the health and safety of our employees, contractors and communities.
Our strong balance sheet has given us financial flexibility to continue with our balanced approach to capital allocation, while also supporting the execution of our strategic growth priorities.
Our long-term focus remains the same to successfully and sustainably implement our strategic initiatives, to strengthen our foundation, grow our base, grow our business, and deliver long-term shareholder value. And with that, operator, we can open up the call to questions.