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Douglas fir lumber prices tank as Tembec (T.TMB) backs softwood deal

Keta Kosman
0 Comments|March 28, 2014

March 2014 waned for North American solid wood players much as it had dawned; with sluggish demand as the constant onslaught of bad weather in key buying regions continued, writes Keta Kosman in Madison’s Lumber Reporter

At least there was a resolution to one transportation issue this week.

Spring Break was credited with the dampened demand for dimension lumber and panel products this week as traders seemed to be running out of explanations for the lack of usually increasing spring sales volumes. On the west coast, truck drivers servicing Port Metro Vancouver returned to work Thursday bringing to a close over three weeks of disruption.

Prices on most wood commodities remained flat once again, while manufacturers and resellers in some important markets were forced to slash prices. In particular, Douglas fir lumber — both at mills in the Pacific Northwest and at stocking wholesalers on the US eastern seaboard — prices tanked miserably.

In standard construction grade #2&Btr Kiln Dried Douglas fir framing lumber, 2x4 and 2x6 fell $27 and $24 respectively to both end the week at US$411 mfbm. Meanwhile, #3/Utility grade 2x4 dropped $15 to US$320 mfbm.

Producers of green Douglas fir lumber reduced their asking prices on 2x4 #3/Utility grade by $40, to US$280 mfbm. 

In company news, Tembec Inc. (TSX: T.TMB, Stock Forum), out of Montreal, QC, mid-Friday released a statement reiterating support for the 2006 Canada-US Softwood Lumber Agreement. The statement reads, in part:

“Recent media reports have made broad generalizations about the views of the Quebec forestry industry, we would like to correct the record.

As recently as this week, the Softwood Lumber Agreement again proved its effectiveness in supporting the interests of the Quebec and Ontario forestry industry in an [international tribunal] ruling. Tembec is pleased with the ruling.”

Resolute Forest Products Inc. (TSX: T.RFP, Stock Forum), also based in Montreal, Que., Thursday announced a $105 million upgrade to its Calhoun, TN, pulp and paper mill, including the installation of a modern continuous pulp digester and other wood chip processing equipment.

When completed by mid-2016, the project will contribute to significantly lower the mill's costs, increase its pulp capacity and improve the mill's versatility.

For its part, Delson, Que.’s, Goodfellow Inc. (TSX: T.GDL, Stock Forum) announced Tuesday its financial results for 2Q ended February 28, 2014. The company reported a net loss of $0.3 million, or $0.04 per share, compared to a net loss of $0.9 million, or $0.11 per share, a year ago. Consolidated sales for the second quarter were $95.4 million, the same as the previous year.

Sales in the US and export activities continued to be strong throughout 2Q, while sales in Canada declined impacted by the slower economy in Quebec and decreasing housing starts in Eastern Canada. 

For the six months ended February 28, 2014, Goodfellow generated net earnings of $0.9 million, or $0.10 per share, compared to net loss of $0.2 million, or a loss of $0.02 per share, a year ago. Consolidated sales for the six months of fiscal 2014 were $205.7 million, compared to $207.5 million for the same period a year ago.
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Keta Kosman
Madison's Lumber Reporter
604 984-6838

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