Market Chatter: West Fraser Timber Co., Western Forest Products Inc Leading Canadian Lumber Producers To Big Profits - NASDAQ.com

West Fraser Timber Co. (WFT.TO) and Western Forest Products Inc. (WEF.TO) are leading Canadian lumber producers to the biggest combined profit since 2006 as mills run at five-year highs to feed a U.S. housing rebound and near-record Chinese demand, Bloomberg reported.

It said lumber mills in British Columbia, Canada's leading forestry region, ran at 86%t of production capacity in the five months through May, compared with 82% for all of 2011, according to the Western Wood Products Association. Lumber futures rose to a 15-month high on Aug. 15 on the Chicago Mercantile Exchange.

The industry is recovering from losses and mill closures during the four-year U.S. housing bust amid resurgent new-home sales and building activity south of the border. Some producers are also capitalizing on orders from China for imported Canadian lumber even as the Asian country's economy slows.

"We're extremely early on in the lumber cycle and it has the potential to be a four-year run," Paul Jannke, a lumber-market analyst at Westford, Massachusetts-based Forest Economic Advisors LLC, said in a telephone interview. He estimates the industry in West Canada in 2012 will probably earn the most since before the housing decline and that next year is looking even better.

Shares of West Fraser, the largest North American maker of softwood lumber used in home construction, have advanced 34% this year in Toronto while Western Forest gained 31%. The S&P/Toronto Stock Exchange Composite Index rose 1.1%.












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Market Chatter: West Fraser Timber Co., Western Forest Products Inc Leading Canadian Lumber Producers To Big Profits - NASDAQ.com