Canadian Lumber Mills Face Potential Shut-Downs on U.S. Construction Drag
Dow Jones10-21
1247 ET - A deepening slump in U.S. home construction is threatening Canadian lumber producers, according to TD Cowen analyst Sean Steuart. U.S. housing starts fell 5.2% in September to an annualized 1.221 million units, missing estimates by 6.4% and hitting near six-year lows, Steuart says. Residential building accounts for 31% of North American lumber volume, according to Steuart who adds that "with rising mortgage rates, we see no obvious near-term catalysts for an affordability reversal." Single-family starts, which consume more lumber, are down 4.0% year-to-date versus last year. Among the most exposed Canadian lumber producers are West Fraser, Canfor, Interfor and Western Forest Products, Steuart says.
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