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Lumber firms notching record quarter
But, analysts expect prices to cool as renovations, do-it-yourself projects abate
by
MARCY NICHOLSON BLOOMBERG NEWS (WPNS)
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Today at 1:58 a.m.
Logs sit stacked at the Groupe Crete Inc. sawmill in Chertsey, Quebec, in this file photo. Lumber prices have cooled recently along with a decline in house renovations.
(Bloomberg WPNS/Christinne Muschi)
North American lumber producers are expected to post another quarter of record profits this week, but most attention will be on the outlook, with prices for wood products stumbling and do-it-yourself renovations slowing.
Producers are building and expanding sawmills in the southern U.S., where costs are low and timber is plentiful, while boosting output on expectations that the surge in home building will continue. Some analysts warn that an oversupply may be building up, even with bottlenecks and supply constraints in British Columbia, Canada s biggest lumber exporter to the U.S.
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Lumber demand is so strong that Resolute Forest Products Inc.’s order book exceeds its inventory, according to Chief Executive Officer Remi Lalonde.
After trucking and railcar shortages hampered shipments during the first quarter, Resolute is now holding extra inventories at a time of record wood prices, Lalonde said during a conference call Thursday. Still, even those stockpiles aren’t enough to satisfy the North American building boom, so Resolute is ramping up output. Full-year production is expected to rise by 7 per cent.
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