Extended late-winter doldrums remained for North America’s forest products industry, even as players across commodities and regions noted a strong sense of a looming pop in deliveries, writes Keta Kosman in Madison's Lumber Reporter
https://madisonsreport.com.
Producers continued to struggle with extreme transportation woes as customers could only wait for long-stalled construction work to resume once accessibility issues are worked out.
Prices were largely flat on almost all solid wood commodities in Canada and the US this week. The recent hot run of #3/Utility grade Western Spruce-Pine-Fir 2x4s, due to stable demand both from China and from domestic industrials producers, is probably what kept other WSPF dimension prices from softening. Sawmills were busy shipping previously-ordered wood while generally maintaining order files from last week, so were able to stave off buyer counter-offers.
Elsewhere, the critical situation at Port Metro Vancouver boiled over into a work stoppage this week. Uber mediator Vince Ready was called in Thursday. Friday some immediate issues were resolved between truckers and the Port. Ready announced he will release his recommendations in six weeks.
Also, on Friday morning the federal government said it will introduce an order-in-council forcing railways to move a minimum amount of grain each week. Transport Minister Lisa Raitt said that minimum will be set at 500,000 tonnes, which works out to 5,500 grain cars each for
Canadian National Railway (
TSX: T.CNR,
Stock Forum) and
Canadian Pacific Railway Ltd. (
TSX: T.CP,
Stock Forum).
She says there will be penalties of up to $100,000 a day if CP and CN don’t meet the requirement.
The government is giving the railways four weeks to ramp up to the minimum level. A record harvest coupled with a transportation bottleneck has left grain sitting in bins across the Prairies. Last year’s harvest was up by about 20 million tonnes.
In company news,
Canfor Corp. (
TSX: T.CFP,
Stock Forum) reached an agreement to sell the Daaquam sawmill in Saint-Just-de-Bretenières, QC, in a deal worth $25 million. The deal with Groupe Lebel and others is expected to close by the end of March, Canfor said in a release.
The Daaquam mill produced 120 million board feet of lumber in 2013.
CEO Don Kayne said the mill was being sold "because it was not core to our Western Canadian operations."
Canfor said proceeds of sale of the Daaquam sawmill and working capital combined with the sale of other associated properties related to Daaquam to other third parties are expected to amount to about $25 million
As well,
Resolute Forest Products Inc. (
TSX: T.RFP,
Stock Forum) February 28 confirmed the signature of a framework agreement with the Quebec government and explained the measures found in the agreement. The agreement includes measures for renewal of water power leases for certain generating stations in Quebec’s Saguenay-Lac-Saint-Jean region as well as consolidation of some of the company’s Quebec facilities.
The framework agreement also provides for an increase in the timber supply guarantee for the La Doré and Saint-Félicien, QC, sawmills as part of the consolidation of Resolute’s sawmill operations in the Saguenay-Lac-Saint-Jean region as well as the grant of a 150,000 cubic metre volume of wood for the Aboriginal community of Mashteuiatsh by the Quebec government, which will enable the community to carry out economic development projects.
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Keta Kosman
Publisher
Madison's Lumber Reporter
604 984-6838
www.madisonsreport.com