Sawmill profits soared 2,000%—now the bursting lumber bubble is bringing back reality – Fortune

Home » Sawmill profits soared 2,000%—now the bursting lumber bubble is bringing back reality – Fortune
The lumber run wasn’t kind to homebuilders and do-it-yourselfers. At one point in May, lumber was up over 300%, meaning for a builder to frame one new home they’d have to spend what prior to the pandemic would be enough for four. But buyers’ misfortune was the timber industry’s big payday. The combined net profits of the five largest publicly traded North American lumber producers (Canfor in British Columbia; Interfor in British Columbia; Resolute Forest Products in Montreal; West Fraser Timber in British Columbia; and Seattle-based Weyerhaeuser) jumped a staggering 2,218% between the second quarter of 2020 ($160 million) and the same quarter in 2021 ($3.7 billion). Those historic earnings, of course, came before the lumber bubble burst in epic fashion this summer as DIYers finally got fed up with sky-high prices. Between mid-May to mid-August, the cash market lumber price crashed from an all-time high of $1,515 per thousand board feet to $389 per thousand board feet. What did plummeting lumber prices do to sawmill profits? The party ended. For the third quarter of 2021—the period covering the collapse in lumber prices—the combined profits of the five largest publicly traded sawmills are down 69% to $1.1 billion. The biggest drop was posted by Interfor (which saw its third quarter profit fall 85% from the previous quarter), followed by West Fraser Timber (down 76%), Canfor (down 72%), Resolute Forest Products (down 70%), and Weyerhaeuser (down 53%). Given it’s a subsidiary of privately held Koch Industries and isn’t required to report…

Sawmill profits soared 2,000%—now the bursting lumber bubble is bringing back reality – Fortune

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