TSX:IFP - Post Discussion
Post by
retiredcf on Jul 11, 2022 8:40am
TD Notes
Trees Weekly
Forest Product Equities Rally, Spurred by M&A Activity Lumber and OSB Prices Showing Resilience After the Q2/22 Crash
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Forest product equities rallied last week, led by the privatization offer for RFP and wood product price gains. The average share-price improvement of 10.7% for our coverage universe last week outpaced gains of 0.9% for the S&P/ TSX Composite and 1.9% for the S&P 500. The Paper Excellence bid for RFP drove a 57.5% improvement in the latter's share price and other equities traded higher in sympathy. On average, share prices of our coverage universe remain 23.1% below year-to-date peaks.
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North American lumber markets continued to inch higher last week. The benchmark Western SPF 2x4 price climbed another 2% last week to US$640/ Mfbm and has improved 15% over the past four weeks. The nearest futures contract price has improved 36% over the past month to US$707/Mfbm. Market reports cited improving order volume towards the end of the week and a generally positive tone.
OSB prices are also improving. The benchmark North Central OSB price increased 5% w/w to US$395/Msf — the first weekly price gain since mid-May. The reference price is still near the lowest point in more than two years and is down 69% since late-March. Anecdotal commentary noted buyers needing to rebuild depleted inventories and order files stretching into early-August for some mills.
U.S. old corrugated container (OCC) prices increased this month, led by demand in the U.S. South. The national OCC average price of US$126/ ton increased 3% m/m and has rallied 4% since May. New recycled-based containerboard capacity (e.g., CAS, GPK, and Norpac mills) is competing for feedstock and has added tension to the market.
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