Norbord Inc. T.OSB

Why recent SP strength?

[Boulter]

Since about October 10, SP up about $6, yet yesterday they shut down a line due to weak demand.

[fatcharlie]

I presume it relates to lower operating costs with one line shutdown coupled with a general spike up of all lumber prices.  Good for us that bought and added under $30 plus we enjoyed a nice dividend while we waited for s/p to go up.  See if we get close to $40 in the coming weeks where my target is.

[dosperros]

It relates to: 1) Supplier disipline.  E.g. shutting down the line, plus GP doing the same.  LP on board with converting to siding.  All in all, they are NOT overproducing any more so that is a good thing. 2) Seasonality.  See below.  This is where the smart money moves in. https://www.cmegroup.com/content/dam/cmegroup/education/interactive/moore-report/pdf/AC-167

[fatcharlie]

Thanks dosperros, excellent detailed summary.  Nice to see S/P heading higher for us longs.  All the best, Charlie.

[Boulter]

Agreed. My dilemma is that after adding to OSB at $28 recently, and seeing continued destruction elsewhere (energy and others), it is now my largest position at 11%. Give some back, or hold. LOL.