Wood products producer West Fraser reported C$687 million in first-quarter sales, a very slight dip from sales of C$688 million in the same quarter a year ago. Net earning were C$19 million, compared with C$29 million in the corresponding quarter of 2010.
In the lumber division, sales were reported as C$411 million, compared with C$409 million a year ago. Shipments were down 6%, the Vancouver, B.C.-based company said, although production rose by 9%. West Fraser’s Canadian mills operated at capacity, while its U.S. mills operated at approximately 75% of capacity.
For panels, which includes both plywood and MDF, West Fraser posted C$91 million in sales, compared with C$100 million in sales a year ago. Shipments for plywood and MDF were down 14% and 24%, respectively. Production was up slightly in plywood but down 9% in MDF.
In its short-term outlook, West Fraser predicted that demand for lumber will remain soft due to the depressed U.S. housing market, thereby putting continued pressure on lumber prices. Demand in China should continue to increase, however.
U.S. plywood imports will most likely continue until the Canadian dollar weakens or U.S. housing improves, the forecast said. Plywood prices should remain soft as a result.
West Fraser Timber is an integrated forest products company producing lumber, wood chips, fiberboard, plywood, pulp and newsprint. It operates mills in British Columbia, Alberta, and eight U.S. states, most of them in the Southeast.