Bullboard - Stock Discussion Forum West Fraser Timber Co Ltd WFG

Primary Symbol: T.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... see more

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West Fraser Timber Co Ltd > TD Notes

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Post by retiredcf on Jul 18, 2022 8:33am

TD Notes

Trees Weekly

Forest Product Equities Searching for Direction Lumber and OSB Commodity Prices Still Grinding Higher

Forest product equity performance was mixed last week. Six of the 10 names in our coverage universe posted gains, but a few notable outliers led to an average share-price decline of 1.3% for the sector last week, compared with declines of 3.3% for the S&P/TSX Composite and 0.9% for the S&P 500. Investors weighed ongoing macroeconomic headwinds (climbing inflation and resurgent mortgage rates) in advance of what we expect will be strong Q2/22 results for most of the sector. On average, share prices in our coverage universe remain 24.1% below year-to-date peaks.
North American lumber prices improved for the fifth consecutive week. The benchmark Western SPF 2x4 price increased 3% last week to US$670/Mfbm and has climbed 21% since mid-June. Commodity-grade lumber-price gains were relatively consistent across key regions. Market reports noted decelerating activity towards the end of the week, in tandem with a typical summer slowdown.
OSB prices are also gaining pace. The benchmark North Central OSB price increased another 8% w/w to US$425/Msf. Price improvement in other key regions was more pronounced (+9% in western Canada and +11% in the U.S. South). Commentary in trade periodicals referenced opportunistic buyer restocking amid limited mill offerings, with order files extending through August.
U.S. softwood pulp prices facing resistance at peak levels; hardwood pulp prices still pushing higher. RISI Fastmarkets reports that preliminary July spot U.S. northern bleached softwood kraft (NBSK) pulp prices have settled at US $1,015/tonne at the low end of reported ranges. The less-relevant list NBSK price has also flattened at US$1,805/tonne. Reports noted less tension in the market following seasonal maintenance downtime. Hardwood pulp prices continue to march higher, with the preliminary list bleached eucalyptus kraft (BEK) price increasing US$40/tonne in July to US$1,620/tonne.