Canfor bounces back into the black, reflecting materially higher lumber earnings and a small pulp products loss. In related news: BC forestry revenue rebounds but employment lags; North American dealers retain upbeat outlook; Maine loggers welcome fed relief bill; and EU wood pellet demand is expected to increase. Elsewhere: Unifor supports Northern Pulp’s bid for creditor protection; and Western Forest Products donates $100,000 to 13 food banks.
In other news: prof studies the effects of glyphosate on northern BC’s forests; climate change hits home for Russia in Siberia; Greece wildfires rage out of control; and wildfire smoke ages, becomes more toxic over time. Meanwhile: Toronto breaks ground on its newest, tallest wood-frame building; and the US National Defense Authorization Act provides for mass timber use.
Finally, the BC Forest Practices Board welcomes two new appointees. Congrats Gail and Cindy!
Kelly McCloskey, Tree Frog Editor
Canfor Pulp Products reported second quarter 2020 results. The Company reported an operating loss of $6.3 million for the second quarter of 2020, down $12.4 million from operating income of $6.1 million reported for the first quarter of 2020. Reported results for the second quarter of 2020 included an $8.2 million finished pulp and raw material inventory write-down at period end. …The Company’s operating results reflected direct and indirect impacts of COVID-19 on global markets, and more specifically the pulp and paper business. Global pulp prices improved during April, resulting largely from increased demand for at-home tissue coupled with supply disruptions, principally in Latin America and Australasia; however, prices came increasingly under pressure in the back half of the current quarter reflecting a sharp decline in printing and writing demand combined with more moderated tissue purchasing activity. 
Unifor is urging the British Columbia court overseeing creditor protection hearings for Northern Pulp to ensure the ridiculous squabble between Paper Excellence and the Nova Scotia government doesn’t destroy the forest industry in Nova Scotia. A financing agreement that is good for workers, protects the environment, and supports the continuation of the forestry sector in Nova Scotia must be achieved. “Following the announcement from the Nova Scotia government to oppose third-party financing to Northern Pulp, it’s clear that more work must be done to reach a mutually-beneficial agreement,” said Linda MacNeil, Atlantic Regional Director. “Tomorrow’s hearing in front of the BC Supreme Court is a defining moment for the future of the forestry sector in this province. We are hopeful the judge will force Northern Pulp and the government to negotiate financing terms that will ensure our members are paid their severance and leave the door open for a future restart of the mill.”
Canfor Corp. recorded $97 million in operating income for the second quarter. The outcome marks a reversal from the $89-million loss for the first quarter of the year for the lumber and pulp producer and put the company $8.1 million into the black on that measure year-to-date. The turnaround reflected improved earnings from the company’s southern yellow pine operations in the United States and European spruce-pine-fire operations and well as a “more modest improvement” in its Western spruce-pine-fir operations centred in B.C. and Alberta. The gain was offset by a moderate decline in the company’s pulp and paper sector. …From a low of US$282 in April, the price for benchmark Western SPF 2x4s finished the quarter at US$432, first reflecting a dramatic drop in U.S. housing starts then a strong uptick in repair and remodeling and new home construction. …The net loss from pulp operations stood at $1.1 million, compared to a $7-million gain for the first quarter.
An annual report filed with the USDA Foreign Agricultural Service’s Global Agriculture Information Network shows that the European Union’s wood pellet market has been relatively unaffected by the COVID-19 pandemic but cautions further market expansion could be limited by member state sustainability requirements. According to the report, the EU consumed approximately 29 million metric tons of wood pellets in 2018, making the EU the world’s largest pellet market. The report predicts wood pellet demand will expand to 30.8 million metric tons in 2020. Residential use of wood pellets for heating accounts for approximately 40 percent of the EU pellet market. …The report predicts if EU demand and trade flows remain consistent with current patterns, the U.S has the potential to supply 65 percent of EU import demand for wood pellets, which would represent a trade value of approximately $1.6 billion in 2020.
