Lumber traders struggled back to their desks Monday morning after an epic North American Wholesale Lumbermen's Association AGM in Las Vegas, NV, last week to discover very weak field inventories and continued strong demand, writes Keta Kosman in
Madison’s Lumber Reporterhttps://madisonsreport.com.
Naturally, lumber prices responded generally upward as the usual seasonal slowdown of lumber buying and selling continues to be elusive so far this year.
Customers in the US, having refused to stock up on wood due to concern that prices might crash, were forced to book significant orders with lumber producers this week.
As a result, sawmill order files on most dimension lumber commodities stretched out toward US Thanksgiving. Traders reported to Madison's that if sales remain strong until that date, manufacturers will sell out of expected production before seasonal curtailments come into effect for year-end.
Counter offers were laughed off as producers increased prices as much as the market would bear. Benchmark dimension lumber item Western Spruce-Pine-Fir KD 2x4 #2&Btr popped $16, or 4.2%, to US$380 mfbm (net FOB mill). This is astonishing for the time of year, and was likely helped in no small part by the announcement of two major sawmill closures in British Columbia this coming spring.
Prices of this most widely-traded lumber commodity are now $52, or 13.7%, above this time last year, and $158, or 41.6%, above the $222 mfbm level of 2011.
Canadian National Railway Co. (
TSX: T.CNR,
Stock Forum), Canada’s largest rail operator, agreed to a new labour contract for some 3,300 conductors, train and yard workers, and traffic co-ordinators represented by the Teamsters union, the railway said Thursday. The tentative three-year deal, the details of which were withheld pending ratification, comes after a week of talks with government-appointed mediators. It averts the possible disruption of a cross-country network.
North American forest products companies releasing financial results this week included
Norbord Inc. (
TSX: T.NBD,
Stock Forum) and
Resolute Forest Products Ltd. (
TSX: T.RFP,
Stock Forum).
Norbord recorded $27 million of earnings in 3Q 2013 compared to $27 million in the same quarter last ye ar and $53 million in the prior quarter. Earnings this quarter include a $9 million one-time non-recurring income tax recovery. Company share prices jumped 5.4 percent as the panelboard producer’s earnings topped estimates.
Resolute Forest Products reported a better-than-expected profit for the fourth straight quarter Thursday as demand for its pulp products improved, sending its shares up 15 per cent in early trading. Resolute, the largest newsprint maker in North America, said results were hurt by a $619 million charge related to income tax.
The company’s net loss was $588 million, or $6.22 per share, in 3Q, compared with a profit of $37 million, or 38 cents per share, a year earlier. Revenue fell 8 per cent to $1.1 billion, mainly due to lower newsprint prices. The company will continue to find more ways to save, announcing plans that it’ll shed up to 170 positions at two facilities in Quebec and Ontario, the company’s CEO said Thursday.
Follow us on Twitter!
https://twitter.com/KetaK
Keta Kosman
Publisher
Madison's Lumber Reporter
604 984-6838
www.madisonsreport.com