by Tyler Durden
Saturday, May 01, 2021 - 06:00 PM
One of the most important things we ve learned over the past year is the vulnerability of global supply chains. Most notably, supply disruptions of lumber have catapulted prices to the moon.
The narrative touted in the public domain is that COVID-19 sparked a dramatic underestimate in capacity by sawmills early in the pandemic as the Federal Reserve slashed interest rates to zero, sparking a housing boom. The influx of demand outpaced supply and has caused lumber prices to jump 340% from a year ago, according to Random Lengths.
In terms of output, the lumber industry is controlled by just a handful of firms, including Weyerhaeuser Co., Georgia-Pacific LLC, West Fraser Timber Co., Ltd., among others, which makes it easier for capacity to be controlled.
Weyerhaeuser To Sell 145,000 Acres Of Timberlands In Washington For $266 Mln
FEDERAL WAY (dpa-AFX) - Weyerhaeuser Co. (WY), a private owner of timberlands, announced Friday an agreement to sell 145,000 acres of timberlands in the North Cascades region of Washington to Hampton Resources for $266 million. The company expects to recognize a gain on the sale and anticipates no tax liability in conjunction with the deal.
The Washington disposition is subject to customary closing conditions and is expected to close in the third quarter of 2021.
Earlier this week, the company completed its acquisition of 69,200 acres of high-quality Alabama timberlands from Soterra, a subsidiary of Greif, Inc., for approximately $149 million.
Lumber extends record rally with order surge straining sawmills
BLOOMBERG
A worker unloads stacks of cut boards at a lumber yard.
Lumber futures extended a record rally as sawmills struggle to meet insatiable demand, with the biggest U.S. producer saying it s sold out of some key homebuilding materials for the next several weeks.
Prices have quadrupled in the past year, buoyed by an unexpected surge in home building and renovations that caught sawmills off guard with low inventories. Demand has held strong since mid-June, keeping inventories low and costs high. That s expected to have spurred record earnings for some lumber producers while adding more fuel to surging house prices.
Weyerhaeuser Co Q1 adjusted earnings Miss Estimates
FEDERAL WAY (dpa-AFX) - Weyerhaeuser Co (WY) revealed a profit for its first quarter that climbed from the same period last year.
The company s bottom line came in at $292 million, or $0.39 per share. This compares with $150 million, or $0.20 per share, in last year s first quarter.
Excluding items, Weyerhaeuser Co reported adjusted earnings of $361 million or $0.48 per share for the period.
Analysts had expected the company to earn $0.91 per share, according to figures compiled by Thomson Reuters. Analysts estimates typically exclude special items.
The company s revenue for the quarter rose 19.1% to $2.06 billion from $1.73 billion last year.