Winter Games

One of the week’s early winners, as the Sochi Olympics opened in spectacular fashion today, is Canfor. This morning’s Vancouver Sun headline above the 2014 Winter Games indicated Canfor’s 2013 profit topped $228 million. Reports say profits in North American lumber markets are showing higher bottom line profits than those of recent years. In his report on CIBC’s Institutional Investor Conference at Whistler, Mark Kennedy confirms big producers “are generating positive free cash flow and will continue with high-return discretionary capital spending.”

Meanwhile the growth of international trade for timber resources reveals not everyone claims to be a winner at the moment. China’s voracious appetite for wood fibre is creating mixed reviews in New Zealand (Hat Tip: Roy Falletta). Labour MP’s in New Zealand were reported to be meeting with Northland forestry representatives this week to discuss concerns over what some consider to be excessive shipment of logs to China. According to the NZ timber industry, so many logs are being exported to China that sawmills are finding it hard to meet construction companies’ needs. In the report, a labour forestry spokesman said it was “madness that in a country with large pine forests there is a shortage of logs. Sawmillers have orders to fill but simply can’t do it as twice the number of logs processed here are sent overseas.”

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