November 07, 2014
MADISON’S WEEKLY LUMBER MARKET UPDATE AND OVERVIEW
Provided by: Madison’s Lumber Reporter
Prices of most North American dimension lumber and panel commodities softened slightly this week as players struggled to overcome the inexorable approach of true winter weather and the usual seasonal slow-down in home building and solid wood manufacturing, according to weekly building materials price newsletter Madison’s Lumber Reporter. Next week is the very relevant North American Wholesale Lumbermens Association annual general meeting in Chicago, IL. Veteran traders will abandon offices to attend this important event, so the focus this week was on closing deals and trying to cement prices for next week when juniors will be handling the sales phones.
The lone stand-out lumber commodity was studs, particularly in the west, as a few consecutive weeks of unexpected mill curtailments for maintenance purposes there took significant production volumes out of the pipeline. Premium-quality Western Spruce-Pine-Fir studs makers had order files booked out so far they went off-the-market this week to allow wood already sold but not yet shipped to be digested through the supply chain.
Prices of studs — regardless of region or species — were mostly sideways as generally soft demand was not enough to offset impressive stud mill order files, out through December.
For their part, Western Spruce-Pine-Fir dimension lumber traders in British Columbia reported an uptick in buying from customers in China this week. Export volumes of Canadian wood to that populous country have been extremely stable so far in 2014 compared to last year, even as buyers there have been somewhat dormant. Suppliers are watching carefully for any increase in demand from China before the end of this year; a repeat of surging 4Q sales as happened in 2011 and 2012 would be very welcome indeed.
Benchmark lumber commodity WSPF KD 2×4 #2&Btr lost another $5, over last week’s $5 drop, to close the week at US$340 mfbm (net FOB mill). This compares to US$352 mfbm one month ago, and US $382 mfbm for that item at the same time last year.
In company news this week, both Stella-Jones and Canfor Pulp declared quarterly dividends. The Board of Directors of Stella-Jones announced Friday a quarterly dividend of $0.07 per share on the outstanding common shares of the Corporation, payable on December 18, 2014 to shareholders of record at the close of business on December 2, 2014. Canfor Pulp Products declared a Quarterly dividend Thursday. Shareholders of record on Tuesday, November 18th will be given a dividend of 0.0625 per share on Tuesday, November 18th. This represents a yield of 2.08%. The ex-dividend date of this dividend is Thursday, November 6th.
In addition, Interfor Corp, out of Vancouver, BC, reported net earnings of $11 million, or $0.16 per share, for 3Q 2014, the company announced Thursday. These figures compare with net earnings of $7.4 million in the previous quarter, and a loss of $130,000 in 3Q 2013. Sales revenue amounted to $373 million in 3Q compared with $390 million in 2Q and $273 million in 3Q last year.
LUMBER FUTURES COMMENT: Consolidates
Lumber Futures traveled mostly sideways on mixed two sided trade consolidating last week’s $339.80 to $318.80 range. Prices started the week slightly higher but were pressured on technically inspired fund selling in the lead January with prices trading below all the key moving averages.
Increased offshore mill orders jumped the market on Thursday led by short covering and seasonal buying pulling the contract up into the middle layer of chart related resistance. Buying slowed against profit taking long liquidation setting the highs from little reaction in the underlying cash market erasing the gains.
The January contract ended the week $1.20 lower to $322.90 but the “spot” November contract which expires next Friday added $4.10 closing at $327.10 narrowing the discount to current cash quotes.
Vice President Forest Products
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Madison’s Lumber Reporter