Volatility and Market Outlook for 2024

  • Western Forest Products expects slight increases in demand and prices of its commodity products in North America in 1Q
  • Demand and prices for Cedar timber and premium appearance products are expected to remain stable
  • Demand for Cedar decking products should firm up as we head into the spring
  • Demand for Cedar trim and fencing products is expected to remain soft until market inventory rebalances
  • Lumber volumes in Japan are expected to remain near those achieved in 4Q 2023
  • Lumber prices in Japan are expected to modestly improve during 2024
  • North American demand and prices for commodity products should marginally improve in 1Q 2024
  • Demand and prices for lumber in China are expected to marginally improve
  • Lower lumber shipments and average lumber prices led to a 19% decline in Western Forest’s lumber revenue in 4Q
  • Specialty lumber shipments represented 60% of total lumber shipment volumes in 4Q 2023
  • Japan lumber shipment volumes more than doubled compared to the same period last year
  • Lumber production was 125 million board feet in 4Q 2023, down from 139 million board feet in the same period last year
  • Lumber revenue fell 32% to C$781.6 million for the full year
  • Speciality lumber shipments represented 51% of total lumber shipment volumes in 2023
  • Cedar lumber shipments decreased 9% compared to the same period last year
  • Japan lumber shipment volumes decreased 10% compared to the same period last year
  • Industrial lumber shipment volumes increased 15% compared to the same period last year
  • Commodity lumber shipments decreased 29% compared to the same period last year
  • Lumber production was 561 million board feet in 2023, down from 655 million board feet in the same period last year

Western Forest Products anticipates slight increases in demand and prices for its commodity products in North America during the first quarter of 2024. The company remains cautiously optimistic as it enters the typically more active spring building season. Demand and prices for Cedar timber and premium appearance products are expected to remain stable, while Cedar decking products should see a firming up of demand. However, demand for Cedar trim and fencing products is expected to remain soft until market inventory rebalances. In Japan, lumber volumes are expected to remain steady, with modest improvements in prices. North American demand and prices for commodity products are projected to marginally improve in the first quarter, but volatility is expected throughout the year. Similarly, China is expected to see marginal improvements in lumber demand and prices. Western Forest Products reported a decline in lumber revenue for the fourth quarter and full year, primarily due to lower lumber shipments and average prices. Specialty lumber shipments accounted for a significant portion of total lumber shipment volumes, and Japan saw a significant increase in lumber shipment volumes. Lumber production decreased in the fourth quarter and for the full year, with a shift in production from North American to export markets. Overall, Western Forest Products remains cautiously optimistic about the market outlook for 2024.

Public Companies: Western Forest Products (N/A)
Private Companies:
Key People: Mary de Wet (Author)

Factuality Level: 7
Justification: The article provides information about Western Forest Products’ expectations for demand and prices of its commodity products in North America and Japan. It also includes details about the company’s fourth quarter and full-year performance. The information provided seems to be based on the company’s statements and data. However, the article lacks additional sources or perspectives to verify the accuracy of the information. Therefore, while the article appears to be factually based on the available information, it is important to consider the potential bias or limitations in the reporting.

Noise Level: 3
Justification: The article provides specific information about Western Forest Products’ expectations for demand and prices of its commodity products in North America and Japan. It also includes details about the company’s fourth quarter and full-year performance. However, the article lacks in-depth analysis, scientific rigor, and actionable insights. It mainly focuses on the company’s outlook and historical data without providing a broader context or exploring the consequences of decisions on stakeholders.

Financial Relevance: Yes
Financial Markets Impacted: The article provides information on the demand and prices of commodity products in North America, Japan, and China. It also mentions the impact of interest rates on buyer activity. Therefore, the financial markets impacted would include the lumber market, construction industry, and potentially the stock market.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article does not mention any extreme events. It primarily focuses on the demand and prices of lumber products and the company’s financial performance.

Reported publicly: www.marketwatch.com