A lack of supply is not going to increase demand for timber

One of the most abused sayings in folk economics is that "supply creates its own demand", which actually dates back to John Maynard Keynes' summary of Say's Law in his 1936 book The General Theory of Employment, Interest and Money. There are two problems with this saying. The first is that applying the saying to the supply and demand of a single good isn't quite faithful to what Jean-Baptiste Say actually wrote, because Say was really talking about the whole economy. [*] Second, most people interpret Say's Law as supporting a build-it-and-they-will-come approach to business. The ruins of many businesses can trace their origins to a mistaken belief that if you have a cool idea, people will automatically buy it. The number one rule in business is that you actually need to provide something that people value.

Anyway, today's example from the New Zealand Herald isn't quite Say's Law, but it's probably worse:

Carter Holt Harvey has stopped supplying structural timber to Bunnings, ITM and Mitre 10.

Master Builders president Kerry Archer said the move came as a surprise, and was probably because the export market was more lucrative.

Archer said while Carter Holt Harvey was not the only timber supplier, it could mean construction projects cost more as builders try to source supplies elsewhere...

"Timber's already gone a couple of times this year. Once again it's supply and demand, so if there's a lack of supply then demand goes up and unfortunately costs will go up with it."

It is supply and demand, but not in the way that Archer describes. A reduction in supply will not on its own cause demand to increase. At least, it won't cause demand of the same good to increase. Reducing the supply of structural timber will increase the price of structural timber, and that might cause builders to buy more steel framing, which will increase the demand for steel framing. But it's not going to increase the demand for structural timber. And that's supply and demand.

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[*] Say, in his 1803 book Traité d'économie politique (A Treatise on Political Economy), wrote (in French, of course, but this is the English translation):

A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value.

Notice that this is about supply of one good creating demand for other goods, which is not how many people interpret it now.