Interfor Corp T.IFP

TD Notes

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Trees Weekly

Lumber Prices Drift Lower as Industry Waits on More Supply Cuts OSB Markets Steady; Downtime Matches Demand Weakness

• Most forest product equities posted share-price gains last week, in tandem with broader market trends. On average, wood-weighted names in our coverage universe improved 3.5%, led by IFP (up 3.5%). Pulp & paper-weighted equities' performance was also positive: the average weekly gain was 3.1%. Sector trends outpaced gains of 1.8% for the S&P/TSX Composite and 1.9% for the S&P 500.

• Lumber markets struggling for momentum; prices have drifted lower. The Western SPF 2x4 (#2 & better) cash price ended last Thursday at US$372/Mfbm — a six-week low, down 5% w/w, and down 19% versus the early-February high. Weak futures markets, rising mortgage rates, and weather weighed on sentiment. Reference 2x4 (#2 & better) Southern Yellow Pine prices fell 2% w/w.

• OSB prices remain in a holding pattern. The benchmark North Central price ended last week at US$250/Msf, flat for the past four weeks. Prices in other regions were little-changed. Reports noted short order files of ~2 weeks, with producer downtime keeping markets balanced for now.

• Mixed momentum for global pulp prices. Following news last week of European producers proposing price hikes on export contract Northern Bleached Softwood Kraft (NBSK) pulp to China of US$20/tonne, one European supplier has revoked the initiative in the face of customer pushback. Lower-priced spot tonnage imports have pressured markets. The current price of imported NBSK pulp into China is US$898/tonne — closing in on early-2023 lows and 11% below the July 2022 peak.