West Fraser Facing Transportation Challenges, Inflation — Commodity Comment

- Advertisement -


By Stephen Nakrosis

- Advertisement -
- Advertisement -

Wood products company West Fraser Timber Co. Ltd. said Wednesday that transportation challenges and inflation were among the issues facing the company.

Transportation Challenges

- Advertisement -

The company said “the extent of the transportation challenges experienced in Western Canada thus far in 2022 continues to be more acute and of longer duration than originally anticipated.”

Ray Ferris, president and chief executive of West Fraser, said transportation challenges facing the company in recent quarters showed signs of improving in the second quarter, but added, “even so, our ability to ship products in a timely manner to meet the demands of our customers is not where it needs to be and therefore transportation and logistics remain key focus areas for the company.”

inflation

Mr. Ferris said inflationary cost pressures persist across supply chains, but added, “an environment of strong demand and above-average product pricing has helped to absorb most of these cost increases.”

He also said, “while we recognize the risks of near-term macro headwinds, including rising mortgage rates and elevated energy prices, we also note that demand for our products has been resilient, and we continue to see favorable long-term market fundamentals in support of our wood building products business.”

North American Market

West Fraser said several key trends that have served as positive drivers in recent years are expected to continue to support medium- and longer-term demand for new home construction in North America.

“Over the medium-term, we expect that an aging stock, lagging completions of previously started new home construction and greater acceptance of work-from-home practices may offset near-term headwinds and drive repair and renovation spending that supports lumber, plywood and OSB demand,” the company said.

West Fraser also said, “growing market penetration of mass timber in industrial and commercial applications is also expected to become a more significant demand growth driver for wood building products in North America.”

It added that demand for new home construction and its wood building products may be reduced near term “should interest rates continue to rise and consumer sentiment and housing affordability continue to be impacted.”

European Market

Demand for the company’s European products is expected to stay robust longer term “as use of OSB as an alternative to plywood continues to grow, and an aging housing stock supports long-term repair-and-renovation spending and additional demand for our wood building products , West Fraser said.

Write to Stephen Nakrosis at [email protected]

By Stephen Nakrosis

Wood products company West Fraser Timber Co. Ltd. said Wednesday that transportation challenges and inflation were among the issues facing the company.

Transportation Challenges

The company said “the extent of the transportation challenges experienced in Western Canada thus far in 2022 continues to be more acute and of longer duration than originally anticipated.”

Ray Ferris, president and chief executive of West Fraser, said transportation challenges facing the company in recent quarters showed signs of improving in the second quarter, but added, “even so, our ability to ship products in a timely manner to meet the demands of our customers is not where it needs to be and therefore transportation and logistics remain key focus areas for the company.”

inflation

Mr. Ferris said inflationary cost pressures persist across supply chains, but added, “an environment of strong demand and above-average product pricing has helped to absorb most of these cost increases.”

He also said, “while we recognize the risks of near-term macro headwinds, including rising mortgage rates and elevated energy prices, we also note that demand for our products has been resilient, and we continue to see favorable long-term market fundamentals in support of our wood building products business.”

North American Market

West Fraser said several key trends that have served as positive drivers in recent years are expected to continue to support medium- and longer-term demand for new home construction in North America.

“Over the medium-term, we expect that an aging stock, lagging completions of previously started new home construction and greater acceptance of work-from-home practices may offset near-term headwinds and drive repair and renovation spending that supports lumber, plywood and OSB demand,” the company said.

West Fraser also said, “growing market penetration of mass timber in industrial and commercial applications is also expected to become a more significant demand growth driver for wood building products in North America.”

It added that demand for new home construction and its wood building products may be reduced near term “should interest rates continue to rise and consumer sentiment and housing affordability continue to be impacted.”

European Market

Demand for the company’s European products is expected to stay robust longer term “as use of OSB as an alternative to plywood continues to grow, and an aging housing stock supports long-term repair-and-renovation spending and additional demand for our wood building products , West Fraser said.

Write to Stephen Nakrosis at [email protected]

,

Credit: www.marketwatch.com /

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox