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 May 31, 2022 7:43am

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Post# 34719213

TD Notes

Trees Weekly

FP Equities Rallied Last Week, in Tandem with Broader Markets Lumber and OSB Price Declines have Accelerated

Following two months of sharp volatility, most forest product equities in our coverage universe rallied last week. The average share-price improvement of 5.1% for our coverage universe last week compared with gains of 2.7% for the S&P/TSX Composite and 6.6% for the S&P 500. Forest product sector improvement was led by lumber and panel-weighted equities (+7.5% for the week). On average, the share prices of our coverage universe are 18.3% below year-to-date peaks.
Lumber prices are still falling as demand slows. The benchmark Western SPF 2x4 price declined 17% last week to US$750/Mfbm — the lowest point since early- December 2021 and 46% below the mid-March 2022 high. Price declines were less severe in other regions (e.g., the Southern Pine Composite declined 8% last week), but remain steep. Market reports referenced rising producer inventories (confirmed by Canfor's announcement on May 26 of extended Q2/22 downtime at its western Canadian sawmills).
OSB prices have held up better than lumber, of-late. The benchmark North Central OSB price declined 3% week-over-week to US$740/Msf and has been treading water since mid-April. Price declines in the U.S. South and western Canada were sharper (down 8-10% w/w). Commentary noted downtime related to a fire at Tolko's High Prairie, Alberta mill mitigating slow demand.
Amid tight supply, broad positive price momentum for domestic pulp and paper continues in Q2/22. North American newsprint and printing & writing paper prices increased 5-7% over the past two months. North American list pulp prices increased 4% in May; Domtar and IP have led the way with proposed June price increases for paper-grade softwood kraft and fluff pulp in June. Price gains have moderated in China (the leading destination for market pulp), but reports note ongoing tight supply in North America following widespread downtime and consistent transportation bottlenecks.