Lumber futures prices hit their highest level in a month as two of Canada’s major producers cut output and transportation issues disrupted shipments to customers, reports Bloomberg.
March Timber Futures (LB1:COM) raised by trade limit from US$45 on Wednesday to $1,336 per $1,000 board foot in Chicago before paring gains; futures have already jumped 34% this month as supplies tighten ahead of the peak construction season.
ETF: WOOD, CUT, NAIL
Canfor (OTCPK: CFPZF) said it plans to cut 150 million board feet of production in British Columbia, citing the impacts of the mountain pine beetle infestation and other constraints on available lumber.
West Fraser Woods (NYSE:WFG) said its ability to ship products in a timely manner “remains tested” after floods late last year washed away rail lines and closed highways in British Columbia, forcing it to take “unscheduled downtime” due to transportation constraints.
“In Western Canada, these transportation challenges are truly unprecedented, both in their magnitude and duration,” West Fraser CEO Ray Ferris said on the 2018 earnings conference call. company, adding that lumber and plywood shipments fell 20% year over year and pulp shipments fell 30% in January. .
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Just three weeks ago, lumber prices suffered their worst drop since July.