West Fraser Timber Co Ltd T.WFG

Alternate Symbol(s): WFG

Forest Products Lumber & Wood Production

West Fraser Timber Co. Ltd. is a diversified wood products company. The Company is engaged in manufacturing, selling, marketing and distributing lumber, engineered wood products, including oriented strand board (OSB), laminated veneer lumber (LVL), medium-density fiberboard (MDF), plywood, particleboard, pulp, newsprint, wood chips and other residuals and renewable energy. Its products are used in home construction, repair and remodeling, industrial applications, paper, tissues, and box materials. Its segments include Lumber, North America engineered wood products (NA EWP), Pulp & Paper and Europe EWP. Its business comprises lumber mills, OSB facilities, renewable energy facilities, pulp and paper mills, plywood facilities, MDF facilities, particleboard facilities, LVL facility, treated wood facility, and veneer facility. The Company operates approximately 58 facilities in Canada, the United States, the United Kingdom and Europe. It also offers wood preservation services.

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West Fraser Timber Co Ltd

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Post by retiredcfon Apr 05, 2021 10:04am

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TD Notes

Trees Weekly

Lumber Equities Rally as Extended Commodity Peak Continues Resilient Western SPF Markets; OSB Prices Keep Rising

Most forest product equities improved last week, led by lumber-weighted names. The average share-price gain for our coverage universe was 2.7% versus gains of 1.3% for the S&P/TSX Composite and 1.1% for the S&P 500. Last week's gains were heavily weighted to lumber producers, with Interfor (+11.8%) and West Fraser (+11.6%) leading the way. The average share-price decline for our coverage universe from recent peak levels has narrowed to 7.6%. This follows unprecedented appreciation from March 2020 through February 2021.
Lumber markets are demonstrating resilience in some regions. The Western SPF 2x4 (#2 and better) benchmark price improved US$20/Mfbm (+2%) w/w to US $1,045/Mfbm. This sets a record after prices flatlined over the preceding month. Prices in the U.S. South continued to moderate; the regional composite of US $895/Mfbm is down 5% from the early-March peak. Reports referenced order files extending into early-May for western Canadian sawmills (longer than normal) and "crosscurrents", but noted improved tone towards the end of the week.

OSB price gains accelerating in the West. The benchmark North Central OSB price increased another 2% last week to US$975/Msf — a record. Gains in western Canada were exceptional (+13% w/w to US$1,200/Msf). Anecdotal reports referenced frustrated buyers in the West and continued short-supply.

K-C leads the way with North American consumer tissue price efforts. Industry leader, Kimberly-Clark has proposed price hikes in the mid-to-high single digits for buyers in Canada and the U.S., effective late-June. We consider this a margin-preservation initiative intended to offset surging pulp prices. North American U.S. dollar-denominated northern bleached softwood kraft (NBSK) list prices have increased 26% over the past six months (spot prices are up 43% over this duration).