Canfor Corp T.CFP

Lumber futures continue to move higher

[Catscratch]

September contract is within spitting distance of $800 and March 2021 contract moved past $600.

Sounds like supply response will be much slower than many are expecting...

- Producers are not motivated to increase supply, they are generating more free cash flow than ever before and I'm sure being cautious about adding costs.

- BC forest fires, COVID and access to skilled labour, enviromental efforts will mute any potential logging activity.

...the perfect storm for higher lumber prices for a prolonged period of time.

[Catscratch]

September contract has now passed $800.

[JohnnyTSX]

The primary reasons for not increasing supply quickly are two-fold. Fibre supply is the first challenge. Two decades of mountain pine beetle in BC has caused significant consolidation in the industry. Secondly, there are political issues in BC with regards to the stumpage system (costs) that had led to permanent mill closures earlier this year. I don't anticipate mills can ramp up in Western

[dosperros]

They literally cannot ramp up as a function of reduced AAC in the province. Another factor is labour.  We drove out many loggers as it's a s**t show and capital intensive.  Even mills getting the trades and such to get a 3rd shift, if they could get logs, if there were logs to cut, would be a hot mess. Finally we have a boom that BC's wall of cheap pine cannot ruin.  I'