Market stability is returning for manufacturers, distributors, and sellers of North American forest products as US home prices have now found a floor, writes Keta Kosman in Madison's Lumber Reporter http://madisonsreport.com
As of November 2013, housing starts in the US passed the 1 million annualized mark and are expected to maintain at least that level for the next couple of years. Meanwhile, lumber consumption in China remains stable while Japan and the UK post increased import volumes.
The extremely cold weather gripping large parts of the continent this week will delay already-booked lumber shipments, but this logistics and supply chain issue will only be temporary. Some customers may struggle with late arrivals of their lumber rail cars, however there will be no ultimate impact on total 1Q shipment volumes.
Southern parts of the US not accustomed to below-freezing weather will likely have some repair and reconstruction work to do once the ice melts and the ground again become workable.
Lumber production and export numbers for most of 2013 in Canada and the US are similar, or slightly up, from the previous year.
Lumber production by Canadian sawmills increased 10.4 per cent from September to 5.4 million cubic metres (2.3 billion board feet) in October, said Statistics Canada Monday. Compared with October 2012, lumber production was up 4 per cent.
On a cumulative basis, from January to September 2013, Canadian sawmills produced 42.71 million cubic metres (18.1 billion board feet), compared to 40.6 million cubic metres (17.21 billion board feet) in the same time period one year earlier, a 4.8 per cent increase.
The latest data out of the Western Wood Products Association, released December 6, shows US softwood lumber production for the first nine months of 2013 at 22.6 billion board feet (53.3 million cubic metres), a 6.5 per cent increase over the previous year when capacity was 21.2 billion board feet (50.03 cubic metres).
When weighed against 2004, the year prior to record-breaking US housing starts, volumes of lumber produced across North America remain down significantly. From January to September 2004, Canadian sawmills produced almost 63 million cubic metres (almost 27 billion board feet), according to StatsCan.
Investors and industry-watchers will be very interested to know that dimension lumber prices were significantly higher this past October than they were in October 2012.
Madison's Lumber Reporter printed benchmark lumber commodity WSPF KD 2x4 #2&Btr prices at US$358 per thousand board feet (mfbm) the week of October 10, 2013. This is a $66, or 18.4 per cent, improvement over mid-October 2012, when that price was US$292 mfbm.
It doesn't take much to imagine what this price difference will make to lumber producing company bottom lines, given that volumes are essentially the same year-over-year.
Company announcements already made in 2014 are from Conifex Timber Inc.
, Stock Forum
), out of Vancouver, BC, which this week announced both the acquisition of BC's Lignum Forest Products for $4 million, and the appointment of current board member, and former BC Minister of Jobs, Tourism and Skills Training (also former BC Minister of Forests, Lands and Natural Resource Operations), Pat Bell, as Executive VP.
Already the premier source for North American softwood lumber and panel price information, market movement, and industry news, Madison's will soon be unrolling new forestry-related products and services. Our freshly updated Madison's Live Lumber Directory, which lists all 1,623 Canadian solid wood operations, is being installed on our new website.
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