Eacom Timber Corporation ETRFF

RE: Lumber Demand

[MadisonReporter]

Thanks guy! I too want to avoid a drama show.
I will have a proper update but for right now; currently the log supply situation remains severely restricted, we had some major mudslides and trees spontaneously falling down just yesterday here in BC, due to big snow melt and heavy rain. It is going to be a long while before the ground dries and firms up enough to let loggers into the bush and on the back roads. Flooding in White Rock is affecting northern Washington State.
Sawmills reported yesterday that they are ripping down wide boards, 2x10 and 2x12, to make narrows. This means a lot: the loss of material in splitting a kiln dried wide into a narrow is significant (sawdust and shavings end up on the sawmill floor. A normal 2x4 isn't 2"x4", after planing its usually 1.75 x 3.875 or whatever, but comes out even smaller if ripped down from a kiln dried wide.) Mills are doing anything they can to move wood, including depleting their LUMBER supply, to delay investing in logging as long as possible until they are sure the market is back.
This is stupid to do in April and WILL catch up with them. If it was November I could see, at a time when home building is slow and mills are trying to unload their inventory before year end, cutting down wides to make narrows could make short term sense but in spring it does not.


There may be a strike in the southern interior of BC we'll find out today or tomorrow, talks were supposed to finish Wednesday but as of yesterday afternoon the two sides were still at it. The Steelworkers came back to the bargaining table Monday with a 95% strike mandate, so this is do-or-die time right now. A strike would effect Tolko, Aspen Planers, two West Fraser mills and I think one Canfor mill plus several independent operators.


Immediate demand for plywood out of the west coast is going for emergency shelters in Japan, the government has ordered 45,000 modular units be built in the next two months. This is not for real home and building construction, but strictly for temporary, to get people out of tents and gymnasiums. Actual rebuilding is not yet being considered, will increase demand for North American lumber for a couple of years when it does begin.
Anyone looking for a quick buck would do well to invest in panel producers; GP, LP, Ainsworth (I think you have to go through Brookfield for Ainsworth which I would not suggest for very good reasons I will not go into here). Plywood prices are already rising on the west coast, as supply is diverted to Japan prices in the east will invariably follow suit.


anyone wondering about the real situation in Japan can find hard data in my press release of Monday:


https://www.madisonsreport.com/assets/JapanRebuildingProjection.rtf

Keta Kosman
Publisher
Madison's Lumber Reporter
Madison's Timber Preview
www.madisonsreport.com