Interfor Corp T.IFP

Wood demand strong for the next decade

[lifeisgood1010]

I rely on the views of CEO of lumber and US homebuilders.
Being an accountant and have never been close to a lumber plant my knowledge
stops at looking at their results and taking in consideration what they see for
the forseeable future.

While 10 years could be a stretch, we know that 2021 will be a very good year on the demand 
side and from what i have read so far from homebuilders,2021 is going to be even stronger.
Depending on the company, i have read from 10% to 20% more.

So once again, for me, it's all about being patient and not letting short term correction take
me out of my position.

The Financial Post reports in its Wednesday, June 9, edition that Weyerhaeuser boss Devin Stockfish believes the home building and renovation boom could keep wood demand strong for the next decade. A Bloomberg dispatch to the Post reports that in anticipation, Weyerhaeuser is eyeing forests and sawmills so it can expand output of boards and planks. Weyerhaeuser stock has climbed 45 per cent in the past year. Rival Canfor has seen its stock jump 150 per cent in the past 12 months. Wood prices soared above $1,000 (U.S.) per 1,000 board feet for the first time ever earlier this year before touching a record high in May on a surprise surge in residential construction. For lumber producers, the rally has spurred all-time high profits. Although Mr. Stockfish foresees years of strong demand, he sees the recent price frenzy as unsustainable. Mr. Stockfish delivered his bullish outlook on the same day that Canfor said it will invest $160-million (U.S.) in a new sawmill in Louisiana and cancelled a previously announced project in Georgia. The world's biggest lumber producer, West Fraser Timber, is expanding capacity at five U.S. mills while Interfor plans to buy four Georgia-Pacific sawmills.

[claritas]

I agree that demand should remain strong, to a point with respect to prices that can be affored. I also think that we need to offset some of this against expected capacity increases are coming on line.  In a brokerage report that I read this week, it was noted that 1,800 million board feet will have been added in 2021 and 1,598 million board feet wil be added in 2022.  This added

[lifeisgood1010]

Hi claritas, if you what a good read on new supply addition for 2021, 2022 and 2023 have a look at a recent report done by Corton Capital.Here is the link. https://img1.wsimg.com/blobby/go/62e29ba5-3add-49d4-9f82-9403ad6efdd1/downloads/CORTON%20Global%20Timber%20Fund%20-%20Special%20Report%20-%20%20.pdf?ver=1622748286999 Also,in may 2021 presentation of Interfor, there is a slide on page

[claritas]

Thanks for the link.  I compared with what I read from RBC and note a lot of discrepencies, which I think are because the Corton report is for the US South only.  Still even then there are difference, for example Westervelt which RBC shows as 350 mmfbm and Corton shows 250 mmfbm.  So I think the RBC numbers are more complete. Regardless, even Corton expect a 'modest'

[sunshine7]

Agree, taking clue from those closest to to demand side is wise. Regarding supply expansion, IFP is closest to expanding capacity profitably as acquisition in Q3 is much sooner than new developments.

[lifeisgood1010]

Typo. it should have been ,"2022 is going to be even stronger."not 2021 At month end, there are 2 big US homebuilders reporting. Will be reading carefully to see if they are still  as bullish for the remainder of 2021 and 2022. For me, the drop in price from the crazy $1700 is just noise. In fact,lower price is much better for the demand side. Let's not forget that the