Strong demand continued for sellers of North American solid wood products this week, to the surprise of many players, writes Keta Kosman in
Madison’s Lumber Reporterhttps://madisonsreport.com.
That inventories in the field are extremely weak has become apparent to all as sawmill order files extended to between two and four weeks for almost all producers, regardless of region or commodity.
On the west coast of the U.S., 80 per cent of large Douglas fir operators went officially off-the-market this week as they sold out of production through the end of this year.
Historically the Canadian Remembrance Day holiday arrives as the business of manufacturing and shipping lumber and panel products is already well into its seasonal slowdown. Normally prices at this time of year are dropping as most players will have stocked up on supplies needed to get them through year-end.
Veteran and neophyte traders alike expressed sentiment that this autumn is unfolding in a very similar way to 2012.
Sellers were able to put the price of benchmark dimension lumber item Western Spruce-Pine-Fir KD 2x4 #2&Btr up another $2 this week, to US$382 mfbm.
By comparison, from the beginning of November to the usual mid-December sawmill curtailment last year, prices of that item increased by 9.4 per cent, from US$328 to US$362 mfbm.
If the same trend materializes this year, as most players now acknowledge it already has, 2013 will end with prices on that most highly-traded commodity at US$418 mfbm.
Only time will tell, of course, if this recent swell in demand will be enough to carry through to such higher prices.
Producers revealed to Madison's Lumber Reporter this week that logs decks are well stocked so at least fibre supply constraints won't be an issue this winter. Rising lumber futures on Friday afternoon trading at the Chicago Merchantile Exchange, up $6.40 for the November contract to US$377.30, may be an indicator of where cash prices are going before that contract closes November 15.
In financial news,
West Fraser Timber Co. Ltd. (
TSX: T.WFT,
Stock Forum), out of Quesnel, BC, this week reported its lumber division's 3Q 2013 sales grew to $581 million, from $491 million a year ago.
Stella-Jones Inc. (
TSX: T.SJ,
Stock Forum) showed sales for 3Q totalled $268.1 million, up 37.2 per cent over last year's sales of $195.4 million. The operating facilities acquired from McFarland on November 30, 2012 contributed sales of approximately $86.2 million, said the Montreal, QC, company.
Delson, QC's, Goodfellow announced this week its financial results for the fiscal year ended August 31, 2013. The company generated net earnings of $5.3 million, compared to net earnings of $4.4 million a year ago.
Consolidated sales for the fiscal year 2013 were $483.5 million, compared to $500.7 million for the same period a year ago. During Fiscal 2013, lumber sales were positively impacted by the demand for hardwood lumber and company efforts to widen the distribution network in all traditional lumber markets.
CanWel Building Materials Group Ltd. (
TSX: T.CWX,
Stock Forum), based in Vancouver, BC, showed in its 3Q results that revenues increased to $205 million, compared to $198 million in the same period in 2012. The increase in revenue relates primarily to higher sales of specialty and allied products as well as contributions from CanWel's recent acquisitions.
The Company's sales in the quarter were made up of 52 per cent of construction materials, compared to 55 per cent in the same period in 2012, with the balance resulting from specialty and allied products, the company said this week.
Also out of Vancouver,
Conifex Timber Inc. (
TSX: V.CFF,
Stock Forum) Tuesday reported a net loss of $0.1 million for 3Q 2013, compared to net income of $2.4 million for 2Q and a net loss of $3.7 million 3Q 2012.
Still in Vancouver,
Interfor Forest Products Ltd. (
TSX: T.IFP.A,
Stock Forum) Wednesday reported a net loss of $0.1 million in 3Q 2013, compared to net earnings of $15.8 million in 2Q and $0.9 million in 3Q 2012.
On the labour front, the United Steelworkers' Wood Council and employer group the IFLRA -- representing Tolko,
West Fraser, and
Weyerhaeuser Co. (
NYSE: WY,
Stock Forum), among others -- had not yet reached an agreement as of press time Friday but were still at the table hammering out the final details.
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Keta Kosman
Publisher
Madison's Lumber Reporter
604 984-6838
www.madisonsreport.com