After a very busy pre-Labour Day week of trading North American dimension lumber products, sellers expected more business this week than actually happened, writes Keta Kosman in Madison’s Lumber Reporter.
No one was complaining however, as prices on solid wood commodities remain firm and volumes are stable over last year.
Western Spruce-Pine-Fir dealers in Canada and the US reported stronger sales early in the week, with demand tapering off toward Friday. In the east, traders of ESPF saw weakened demand compared to last week except in 2x6 which continues to be much-desired. That size goes into the more volatile multi-family home building sector.
Despite slightly weakened demand over the previous week, traders found it unnecessary to entertain counter-offers from customers. There was little-to-no discounting needed to move goods, especially in the east. Lumber inventories in the field remain extremely low, with most customers continue the now long-held practice of just-in-time buying, so are currently the very definition of motivated buyers.
While some specialty items were hotly sought after, others experiences a down-market. Specifically green Douglas fir, most highly prized by home builders in the US northeast, which had a discouraging drop in demand this week.
Order files at most sawmills remain consistent at about three weeks depending on the item, indicating continued underlying strong demand. As September wanes and autumn hits in earnest, lumber manufacturers will see if the usual seasonal price weakness hits this year.
For the past couple of years a surge of demand out of China at just that time, when prices are traditionally at their lowest, has buoyed prices off historical low cycles. Whether that will happen again remains to be seen; so far this year lumber export volumes from British Columbia to China remain stable.
Panel products, some of which suffered a slash in prices last week, bounced back up this week. In particular, benchmark Oriented Strand Board 7/16” Ontario regained $5, after tanking $15 last week, to settle at C$215 msf this week.
Manufacturers of OSB and Plywood remain nervous as this is very close to their cost-of-production.
Regardless, panel traders reported new orders coming in every day. Recent supply curtailment out of one major OSB producers is helping to keep the supply-demand balance stable as autumn approaches.
In company news this week,
West Fraser Timber Co. Ltd. (
TSX: T.WFT,
Stock Forum), out of Vancouver, BC, announced Friday that it is proceeding with a renewal of its normal course issuer bid for up to 4,000,000 Common shares of the Company, representing approximately 5 per cent of the issued and outstanding Common shares of the Company. On September 5, 2014, the Company had a total of 81,583,258 Common shares outstanding.
As well,
Resolute Forest Products Inc. (
TSX: T.RFP,
Stock Forum) Tuesday said competition from a government-subsidized mill in Nova Scotia, higher operating costs, and falling demand have forced the closure of its Laurentide paper mill in Shawinigan, QC, affecting 275 workers. The Montreal-based pulp, paper and lumber producer told workers Tuesday that the facility that makes commercial paper will close about mid-October.
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Keta Kosman
Publisher
Madison's Lumber Reporter
604 984-6838
www.madisonsreport.com