VANCOUVER — Canfor Corporation reported its third quarter of 2024 results. Overview: Q3 2024 operating loss of $560 million, including a $311 million asset write-down and impairment charge as well as other one-time items; shareholder net loss of $350 million. After taking into consideration adjusting and one-time items, Q3 2024 operating loss of $139 million, compared to a similarly adjusted operating loss of $135 million in Q2 2024. Persistent pressure on North American lumber markets and pricing, especially in US South; positive results from Alberta and Europe. Ongoing North American lumber market weakness, high duties and persistent challenges accessing economic fibre led to the announcement of sawmill closures in BC and, as a result, an asset write-down and impairment charge of $100 million in the lumber segment. …Canfor’s CEO, Don Kayne, said, “We sincerely regret the impact these decisions have on our employees, their families, contractors, and the businesses that support our operations and the local community.”
VANCOUVER, BC — West Fraser Timber reported Q3, 2024 results. Third quarter sales were 
MONTREAL — Canadian National Railway is reporting that profits nudged down in its latest quarter, when wildfires and labour disruptions took a toll on operations. The country’s largest railway says net income slipped by two per cent to $1.09 billion in the three months ended Sept. 30, down from $1.11 billion in the same period a year earlier. The Montreal-based company says third-quarter revenues rose three per cent to $4.11 billion from $3.99 billion the year before. …CEO Tracy Robinson says CN managed to recover quickly from problems posed by forest fires and “prolonged labour issues” during the quarter. The hurdles included a grain workers strike in B.C. last month and a countrywide lockout at CN in August that snarled some shipments for weeks.
Prices of products manufactured in Canada, as measured by the Industrial Product Price Index (
Steady sales and tightening supplies drove framing lumber prices higher in many species. Traders balanced news of rising mortgage interest rates with growing positive sentiment among single-family homebuilders. The Random Lengths Framing Lumber Composite Price notched its third consecutive weekly increase, rising $8 to $411. That is the composite’s highest level since April. Western S-P-F buyers padded light field inventories and procured occasional insurance loads amid a perception that supplies were less available. …In the South, upward price momentum eased as the week progressed. Sales moderated to a steady, but less fervent pace compared to recent weeks. Hurricane Milton’s aftermath generated a modest increase in demand for items needed to rebuild fences and make other repairs in the storm’s peripheral path.
OTTAWA — Forecasters expect the Bank of Canada to speed up the pace of interest rate cuts and lower its policy rate by half a percentage point this week. The central bank’s interest rate announcement on Wednesday comes after Statistics Canada reported the annual inflation rate in September tumbled to 1.6% — below the Bank of Canada’s two per cent inflation target. Nathan Janzen, an assistant chief economist at RBC, said the latest consumer price index report reinforced his expectation for a supersized rate cut. “You have an economy that’s probably performing worse than necessary to get inflation under control and still interest rates (are) at restrictive territory,” Janzen said, adding that the central bank needs to lower interest rates to a level that doesn’t hinder economic growth. …The Bank of Canada has lowered its key interest rate three times so far, bringing it down to 4.25%.
NEW YORK, NY — Mercer International reported its preliminary financial results for the third quarter of 2024. For the third quarter ending September 30th, 2024, Mercer reported revenues of $502.1 million, up from $499.4 million in the second quarter of 2024, and a net loss of $17.6 million, compared to a net loss of $67.6 million in the second quarter. …Mr. Juan Carlos Bueno, Chief Executive Officer, stated: “We continued to see strength in softwood pulp markets with relatively flat fiber costs in the third quarter of 2024. However, our operating results for the quarter were constrained due to the occurrence of several unrelated events that impacted pulp production, including the previously announced unscheduled downtime of 23 days (approximately 35,500 ADMTs) at our Mercer Peace River mill, a slower than normal maintenance start-up and other production upsets at our Stendal Mill.
A looming unknown is the potential impact from the European Union’s deforestation regulation (EUDR). If this policy requirement is implemented as currently planned on December 30, 2024, it will cause total trade chaos in world markets. Simply put, many countries will not be ready to meet the stringent requirements of the policy. While the markets may be lacklustre for the rest of 2024, the EUDR could quickly change it all with the potential of huge dislocations in global trade flows. …A quick pro-forma analysis on the lumber revenue versus the costs of lumber production of four major producing regions in North America plus Central Europe yields a very clear story. …The results are essentially negative in all regions of North America given their higher costs. …Permanent mill closures at high-cost mills have also been occurring in BC, the US Pacific Northwest regions and the US South. 
The softwood lumber market’s reaction to last week’s encouraging economic news remained moderate at best. Demand was steady in most species, but news of reduced interest rates fell far short of jump-starting sales. As a whole, prices wavered and the Random Lengths Framing Lumber Composite Price dropped $1 for the second consecutive week. Western S-P-F sales were unspectacular. …Lumber futures surged early in the week, but the board gave back on Wednesday. The front month continued to carry a premium to the physical market, affording some traders basis opportunities. Hurricane Helene’s approach through the Gulf of Mexico interrupted an otherwise steady Southern Pine market. Buyers covered mostly immediate needs in early trading and scaled back new orders as the week progressed. …A perception that recent curtailments across the South had aligned supplies more closely with demand infused a firmer tone into the market.
With lower mortgage rates expected, will we see a hotter housing market increasing demand for lumber and lumber prices? …Although many mills continued to run during previous tough times to drive high-cost producers out of the market, mills are taking downtime more quickly now to support prices. …After a slowdown in homebuilding activity over the previous months, 
WASHINGTON — Inflation in the United States dropped last month to its lowest point since it first began surging more than three years ago, adding to a spate of encouraging economic news in the closing weeks of the presidential race. Consumer prices rose just 2.4% in September from a year earlier, down from 2.5% in August, and the smallest annual rise since February 2021. Measured from month to month, prices increased 0.2% from August to September, the Labor Department reported Thursday, the same as in the previous month. But excluding volatile food and energy costs, “core” prices, a gauge of underlying inflation, remained elevated in September. Core prices in September were up 3.3% from a year earlier and 0.3% from August. …The improving inflation picture follows a 
In September, mortgage rates maintained their downward trajectory, returning to levels last seen two years ago. According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage fell to 6.18%, a decline of 32 basis points (bps) from August. The 15-year fixed-rate mortgage saw an even steeper decline, decreasing by 42 bps from August to 5.26%. Additionally, the 10-year Treasury rate declined by 23 bps, falling from 3.98% in August to 3.75%. According to the NAHB forecast, the 30-year mortgage rate is expected to near 6% on a sustained basis by the end of 2024, with a further decline to just below 6% during 2025. NAHB also predicts furthering easing by the Federal Reserve before the end of 2024.
Persistent upward movement in framing lumber prices left many items approaching their highs for the year in the fourth quarter. The current supply-driven run has pushed the Random Lengths Framing Lumber Composite Price to its fourth consecutive weekly increase. The front month in lumber futures continued to trade at a slight premium to the physical market, but the January contract opened a sizable spread with cash. …Mills in the South continued to push for double-digit price hikes with moderate success. Most Southern Pine prices continued to climb. However, buyer resistance to the highest mill quotes grew more intense as the week progressed. …Coast dimension sales continued to outpace production, keeping upward pressure on some prices. Board markets remained on a divergent trend. Producers continued to adjust prices predominantly downward.
Southern Pine dimension mills have attempted to keep supplies more in line with sluggish lumber demand in recent months, but perceptions remain mixed whether it has ultimately been effective in tempering downward price pressure. Several mills reportedly curtailed production through the summer months without making public announcements to indicate cutbacks. Most of the measures were modest, often limited in scope to simply reducing shifts, according to sources. …Production curtailments by Western S-P-F mills have also contributed to rebalancing supplies and demand, as buyers in northern-tier markets who purchase both species have encountered dwindling availability. However, some SYP traders are unsure whether the quiet production cutbacks have had any true effect on the overall market. New mills in some producing zones came online in early summer and ramped up output.
The Forest Sector Outlook – 2024-Q2 report features global economic and forests/industry/market updates from all continents around the world. The report includes regional reviews on local market and industry developments in wood products and timberlands for each region. This 13-page report can be found on the RUSS TAYLOR GLOBAL 
