Lumber, OSB, and plywood prices continue to rise – According to Random Lengths (“RL”), the Framing Lumber Composite increased $62 w/w to $673 as transportation issues in BC continue to support W.SPF pricing, which was up $100 w/w. In OSB markets, the OSB Composite increased $19 w/w to $600, as prices in Western Canada saw the largest increase at +$50 w/w. For next week, RBC Elements™ forecasts that the RL Framing Lumber Composite will increase $65 w/w to $738 and that the RL OSB Composite will increase $13 w/w to $613.
PotlatchDeltic announced a $4 per share special dividend, slightly below our $5 forecast but in line with guidance of $3–5 – The special dividend will be paid on December 31, 2021 to shareholders of record on December 22, 2021. The company will also increase its quarterly dividend by 7.3% to $0.44 (from $0.41). The base dividend increase is modestly below our $0.45 forecast.
International Paper has restarted one PM at Prattville; second PM likely to restart in early 2022 – At an industry conference, the company noted that the 500k ton/year PM2 is up and running after being down for approximately two and a half weeks (assuming it restarted prior to Thanksgiving). The larger 620k ton/year PM1 is not expected to restart until early 2022. The company could see increased transportation costs from moving containerboard at distant mills to nearby box plants and expects a negative $60–70 million impact on Q4 results. In addition, IP revised its input cost headwind +$35 million vs. prior guidance due to increased natural costs and wood fiber costs.
Chart of the Week: W. SPF lumber prices are catching up to SYP following supply disruptions
Pulp prices down in North America but moving up in China – According to RISI, US pulp prices are down $20–40/mt m/m as high inventories and weaker offshore demand shifted the power toward buyers. However, recent flooding in BC has contributed to curtailments at four BC Interior pulp mills, which has caused some concern about availability. January SHFE pulp futures jumped $170/mt w/w to $813/mt, as concerns about potential shipping delays from Canada and Europe are increasing. Cash transactions were reported in the $700–740/mt range this week, up $24 w/w.
Paper Excellence indefinitely curtailing its tiskwat mill in Powell River, BC – According to the company, the former Catalyst Paper mill is curtailing production due to the ongoing contraction of global paper markets and paper prices, particularly in Asia, that is creating significant ongoing financial losses at the mill.