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Salman Partners forecasts mixed Q3 earnings

Vancouver, BC — Salman Partners are forecasting a mixed Q3, as compared to Q2, according to their recent Forestry …

Vancouver, BC — Salman Partners are forecasting a mixed Q3, as compared to Q2, according to their recent Forestry Research Note, even with the material rise in the Canadian dollar. The dollar rose significantly in the last quarter, averaging US $0.957 for the quarter, 5.1% higher than its Q2 average of US $0.911.

Lumber prices were mixed in Q3, with most trending between 4% positively or negatively q/q. Notable exceptions were wide-widths 2x10s, with an increase of 10% and panel prices, with OSB up 14.4% and Western ” 5-ply up 13.1%. Pulp prices were up in the range of 3%, with prices increases of US $20 per tonne in North America and US $30 per tonne in Europe recently being successfully implemented. Newsprint continued its downward trend in Q3, with prices down 4.5%. Despite negative consumption of uncoated freesheet (down 5.4% YTD), prices were down only 0.8% for offset rolls and cut size prices were up by 2.8% over the previous quarter. Packaging prices were up, in the range of 5%.

Looking forward, Salman Partners see little positive pricing momentum in forest product commodities, especially in terms of the Canadian dollar.

Source: Forestry Research Note, Salman Partners, Oct. 3, 2007