Historically-high lumber prices have had a positive effect on Canfor's bottom line.
The integrated lumber, pulp and paper producer reported Thursday $434.2 million in adjusted net income for the first quarter of 2021, compared to a loss of $56.7 million during the first quarter of last year when the pandemic began to take hold.
Canfor finished last year $517.4 million to the better as lumber prices skyrocketed during the second half of 2020.
The wave has not yet subsided as, according to the report, random-length western spruce, pine and fire 2x4 #2 and better averaged $972 U.S. per thousand board feet during the first quarter of 2021, up $272 from the previous quarter. Similarly, southern yellow pine 2x4 #2 and better stayed above $1,000 U.S.
"Global lumber market fundamentals remained exceptionally strong in the first quarter of 2021, principally driven by sustained high levels of North American demand," the company said in the report. "The North American market continued to benefit from new home construction activity that reflected the ongoing urban-to-suburban shift, strong demand in the repair and remodeling sector and lean inventory in the supply chain."
A "significantly improved" results on the pulp and paper side also contributed as Canfor Pulp reported $8.4 million in net income for the quarter, compared to $7 million for the same period last year and a $10.2-million loss for the fourth quarter of 2020. For 2020 as a whole, Canfor Pulp recorded a $22.4-million net loss.
The company mainly credited a surge in global demand, particularly from China, combined with "ongoing global logistics constraints" for the improvement. As a result, the price of northern bleached softwood kraft on orders from China saw sharp increases.
Looking ahead, the company said global lumber market fundamentals are anticipated to remain solid and softwood kraft pulp markets are projected to remain well positioned throughout the second quarter.
It also said a schedule maintenance outage at the Intercontinental pulp mill in Prince George will deliver an impact with a projected 14,000 tonnes of reduced production, "combined with higher associated maintenance costs and lower projected shipment volume."
