Bullboard - Stock Discussion Forum Domtar Corporation T.UFS

Forest Products Lumber & Wood Production

Domtar Corp makes and sells a variety of fiber-based products through its pulp and paper mills and its network of converting and forms manufacturing operations throughout the United States and Canada. The company operates under a single business unit: pulp and paper. This segment produces communication papers (copy, electronic imaging, and uncoated freesheet papers), specialty and packaging... see more

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Domtar Corporation > TD Notes

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Post by retiredcf on Mar 15, 2021 8:31am

TD Notes

Trees Weekly

Most P&FP Equities Posted Modest Gains Last Week
Lumber Prices Approach Apparent Peak; OSB Prices Still Climbing

P&FP share-price trends were generally positive last week, with all but two equities in our coverage universe posting gains. The average share-price increase for our coverage universe was 2.1% versus gains of 2.6% for both the S&P/TSX Composite and S&P 500 Composites. Positive performance last week was led by Louisiana-Pacific (+8.3%) as oriented strand board (OSB) commodity prices continued to surge, setting new records. The average share-price decline for our coverage universe from recent peaks is 9.9%, but prices are still up an average of 257.2% from April 2020 trough levels.
Lumber prices crept higher in some regions, but overall momentum has slowed. The Western SPF 2x4 (#2 and better) cash market price was flat at US $1,025/Mfbm (a record) for the third straight week. The Random Lengths Framing Lumber Composite (RLFLC) price increased 1% (to US$1,044/Mfbm), led by utility grades and some high-value grades (e.g., Western Red Cedar). Anecdotal reports cited buyer "fatigue", but order files remain extended.
Relentless OSB price gains. The benchmark North Central OSB price increased another 2% last week to US$915/Msf — a record. Gains in other regions (e.g., the South West) were more pronounced. Reports mentioned ongoing supply scarcity.
March pulp price hikes successfully implemented; more on deck for April. Preliminary North American softwood pulp list prices increased US$120/tonne this month (+8-9%). This builds on evident positive momentum since last December as producers benefit from lower mill inventories, unplanned downtime, and resurgent demand. Resolute Forest Products has proposed another US$145/tonne increase in April, which would take the list northern bleached softwood kraft (NBSK) price to US$1,565/tonne. Although fundamentals have improved, we are skeptical that there is enough support for accelerating gains from current levels.