Canfor Customer Update

Welcome to our latest edition of the Canfor Customer Update. Your feedback is appreciated, and helps us identify the topics that are most important to you.

Sincerely,
Wayne Guthrie


Market Update

For the most part, lumber prices around the globe have been disappointing so far in 2015. Nearly all forecasts have been too optimistic. What did we all miss? 

The extreme currency volatility in many lumber producing areas was not expected. This included the collapse of the Russian Ruble, which created a flow of inexpensive product into China and pushed all lumber species pricing lower. Also, the Euro depreciated and made European spruce and pine much more competitive in all markets, particularly in Asia. The Canadian dollar also fell, and the returns in the US were better than the tough China market with its extra Russian and Euro supply. Furthermore, the US shipments to Asia fell and were diverted back to the domestic market. And if that was not enough, congestion at all the west coast ports made shipping anything offshore more difficult. All of these factors created a surplus of supply for North America. 

On the demand side, although sluggish in parts of the country that were worst hit by the tough winter, it appears that demand is not far off the forecast, and slow improvement is expected to continue. As one of our best national customers put it, "where the weather is good, the business is good." 

Currency Exchange Rate Index (Oct 2014= 1.00)

 
 
 
What we have seen since mid Q4 of last year, and into Q1 this year, has not so much been an increase in production, but rather than a shift in product flow back to domestic markets. 
 
So where do we go from here? In the last couple of months, we have been sensing an increase in offshore shipments from Canada (data will be released in the coming months). This trend will undoubtedly continue now that Canadian shipments are subject to tax. As a result, global supply and demand should start to rebalance and we will see some price appreciation. We are very cautious on the balance of Q2 but feel we will get back to more normalized prices in the second half of 2015.

   

  

I was in China a few weeks ago and our business remains steady. As many of you know, I travel there regularly and always look for new developments. This time, I was taken by the volume of Euro wood. The slowdown in the Middle East and North Africa has freed up this additional supply to go to China. However, I did not witness a huge increase in Russian volumes.

 

 

 

Expansion in US Southeast Provides Long and Wide Lumber

We recently completed the acquisition of three companies in the southern United States – Beadles and Balfour Lumber Companies in January and Southern Lumber Company in April.  This will increase our production capacity of quality southern yellow pine by 300 million board feet.

Over the next few issues will feature one operation to provide an in-depth look at each new addition and what it adds to Canfor’s growing product offering. First, we begin with our most recent acquisition - Southern Lumber.

On April 1, 2015, Canfor completed the acquisition of Southern Lumber in Hermanville, Mississippi. Southern Lumber now represents our western most SYP mill with competitive freight access to many of the busiest markets in the US South. The mill is well known for its high quality and long and wide lumber. With this acquisition, Canfor is now the source for 2x10, 2x12 and for lengths from 22-26’. As part of Canfor’s expansion into the South, the mill definitely complements Canfor’s basket of product offerings. 

 
 
 

 

For more information on products from the
Hermanville, Mississippi mill, please contact:

 

General SYP Enquiries


Frank Turnbull

Divisional General Manager for SYP Sales and Marketing
Phone:
604-992-3170 Email: frank.turnbull@canfor.com

Other Enquiries

 
Doug Stroud
Sales Manager
Phone: 601-605-0575 Email: dstroud@southernlumber.net

 

 


New Products

Along with the new products available from our growth in the US Southeast, we are further expanding our product offering from select Canadian operations to better meet the needs of our customers. For now, we’ve focused these efforts on our Southern BC operations – home to our supply of premium Canfor RED products and some of the best quality SPF and Douglas Fir/Larch fibre in North America.

We have taken steps to identify and develop new products to complement our core dimensional lumber business, converting some of this premium fibre to different sizes and grades that provide our customers with higher yields and better value.

Our newest Canfor RED product is a 5/4” x 6” industrial board, developed in direct response to requests from customers requiring a different solution for their business needs. Available in a full range of lengths and grades, this FSC certifiable product is ideally suited for appearance applications such as decking or fascia as well as numerous industrial applications such as packaging or furniture components. For more information, contact Bob Smith, General Manager, Kootenay Region and Specialty Product Development at 604-661-5277.

 

 
 
 
 
 

Canfor Red MSR

Already well known for their premium quality SPF MSR, we are pleased to announce the addition of Douglas Fir/Larch production to our Elko operation in the Kootenays.  Armed with the latest technology in sawmilling, drying and finishing, Elko is fully equipped to convert this premium fibre into the tallies and grades you require as we move into MSR high season. For more information, contact Maria Pemberton, Manager of Specialty Product Sales at 604-264-6017.