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 Dec 20, 2021 7:29am

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Post# 34246018

TD Notes

Trees Weekly

Lumber & OSB Commodity Price Surge has Legs Equities Take a Breather Following Recent Rally

Forest product equities took a breather last week, following recent share- price strength. The average week-over-week share-price decline of 1.3% for our coverage universe was consistent with broader market weakness. Investors digested recent gains and looked past ongoing exceptional lumber and panel commodity price momentum. Weaker trends last week were led by RFP (down 6.4% w/w, following a 41.8% recovery from the mid-September low). Since Q3/21 lows, the average share-price recovery for our coverage universe is 23.5%.
Lumber prices keep climbing as strong demand growth corresponds with supply constraints. The benchmark Western SPF 2x4 cash market price increased 12% to US$985/Mfbm — the highest level since mid-June and well above our view of mid-cycle potential. Price gains decelerated from the recent pace, but overall trends are very strong, driven by above-normal demand (confirmed by better-than-expected November U.S. housing starts) and ongoing shipping hurdles — the latter exacerbated by tight log supply in some regions.
The OSB price recovery gained momentum last week. The benchmark North Central price of US$610/Msf increased US$60/Msf w/w (+12% — the fastest weekly gain since late-July). Price gains in western Canada outpaced other regions. Market reports referenced order files extending well into January and sellers taking product off the market through the second half of last week.
Opposing trends across pulp markets. List northern bleached softwood kraft (NBSK) pulp prices dropped US$10-US$30/tonne in December (to US$1,440/ tonne at the bottom end of the range), while spot prices gained slightly. According to Fastmarkets RISI, effective transaction NBSK prices in China increased 8% m/ m, as B.C. shipping constraints supported producers' price-hike efforts.