Core Insights - Interfor Corporation reported a net loss of $215.8 million in Q3 2025, a significant decline from a net profit of $11.1 million in Q2 2025 and a loss of $105.7 million in Q3 2024 [1][2][9] - The adjusted EBITDA loss was $183.8 million on sales of $689.3 million, compared to an adjusted EBITDA of $17.2 million on sales of $780.5 million in Q2 2025 [2][9] - The company is facing ongoing challenges in the lumber market, leading to production curtailments and a decrease in average selling prices [2][3][4] Financial Performance - The adjusted EBITDA loss of $183.8 million includes a $147.4 million net duties expense related to U.S. tariffs [2][8] - Lumber production decreased to 912 million board feet, down from 935 million board feet in Q2 2025, reflecting a 23 million board feet reduction [2][9] - The average selling price of lumber fell to $618 per thousand board feet, a decrease of $66 from Q2 2025 [2][9] Market Conditions - North American lumber markets are expected to remain volatile due to economic adjustments, tariffs, and labor shortages [3][4] - The company anticipates that Canadian lumber will continue to be a key supply source for the U.S. market despite challenges [5][6] - Interfor's diversified operations across Canada and the U.S. position it to navigate market volatility effectively [4][6] Capital and Liquidity - Net debt increased to $893.3 million, representing 41.6% of invested capital, up from $798.0 million in Q2 2025 [2][12] - The company completed a bought deal equity offering generating gross proceeds of $143.8 million, which was used to reduce existing debt [2][13] - Total capital expenditures for 2025 are projected to be between $90 million and $95 million [8] Strategic Initiatives - Interfor sold Coastal B.C. forest tenures for gross proceeds of $3.4 million, indicating a focus on monetizing assets [2][8] - The company has plans to reduce lumber production by approximately 250 million board feet in Q4 2025 due to weak market conditions [2][3] - An early renewal of the Revolving Term Line was completed, enhancing financial flexibility with a commitment of $562.5 million [2][20]

Core Insights - Western Forest Products Inc. reported a significant decline in financial performance for Q3 2025, with Adjusted EBITDA of negative $65.9 million, largely due to a non-cash export duty expense of $59.5 million [1][2] - The company experienced a net loss of $61.3 million in Q3 2025, compared to a net loss of $19.6 million in Q3 2024 and $17.4 million in Q2 2025 [2][3] - Revenue for Q3 2025 was $233.0 million, a decrease from $241.7 million in Q3 2024 and $289.1 million in Q2 2025 [2][3] Financial Performance - Adjusted EBITDA margin for Q3 2025 was negative 28%, compared to negative 4% in Q3 2024 and 0% in Q2 2025 [2][3] - Operating loss prior to restructuring and other items was $78.0 million in Q3 2025, up from $24.4 million in Q3 2024 and $12.3 million in Q2 2025 [2][3] - The company reduced net debt by $15.7 million compared to the end of Q2 2025, resulting in a net debt to capitalization ratio of 2% [6][2] Production and Sales - Lumber production was 107 million board feet in Q3 2025, down from 127 million board feet in Q3 2024 [6] - Lumber shipments totaled 129 million board feet in Q3 2025, compared to 138 million board feet in Q3 2024 [6] - The average lumber selling price increased to $1,409 per thousand board feet in Q3 2025, up from $1,378 per thousand board feet in Q3 2024 [6] Market Conditions - The North American lumber market is expected to remain weak due to high interest rates and low consumer confidence, compounded by elevated inventory levels [9] - An incremental 10% tariff on imported lumber products, effective October 14, 2025, is expected to further complicate market dynamics [8][9] - In international markets like Japan and China, housing demand is declining, but low lumber inventories are stabilizing prices [10] Strategic Developments - The company is focusing on transitioning to higher value products and has ongoing construction of two continuous dry kilns, with completion expected in early to mid-2026 [6][4] - Planned capital expenditures for 2025 have been reduced to approximately $30 to $35 million, including $16 million for the continuous dry kilns [6][4] - The company recorded $5.0 million in other income as an initial insurance recovery related to the Columbia Vista sawmill [14]

Group 1 - Weyerhaeuser's shares have declined by 26% over the past year, indicating poor performance [1] - The decline in housing construction activity has significantly impacted lumber demand and pricing, posing challenges for Weyerhaeuser [1] Group 2 - The article reflects a contrarian investment approach based on macro views and stock-specific turnaround stories [1]

Core Insights - The housing market is experiencing a slowdown, leading to builders cutting prices and offering incentives to sell finished homes, which in turn affects the demand for construction materials like lumber [1][3][19] - Lumber futures have decreased significantly from their August peak of around $695 per thousand board feet to the $590–$610 range, indicating a shift in market dynamics where supply exceeds demand [3][4][17] - Steel demand is also weak, with global prices under pressure due to insufficient consumption across various sectors, although certain regions still show strong demand for steel related to infrastructure and industrial projects [12][16][20] Lumber Market Analysis - Builders overestimated the demand for new homes, leading to excess inventory and a subsequent decline in lumber prices as housing starts and permits dropped [2][3][4] - The lumber market is signaling that housing is not absorbing materials quickly enough, which is a precursor to a slowdown in flatbed freight related to residential construction [8][19] - The expectation is that flatbed carriers heavily reliant on residential construction will face increased competition and need to diversify their service offerings to maintain profitability [10][18] Steel Market Analysis - Global steel demand has been weak throughout 2025, with prices affected by oversupply and insufficient end-use demand, particularly in Asia [12][13] - U.S. steel mills are benefiting from tariffs that limit imported steel, allowing them to maintain production levels despite weak global demand [14][16] - Certain sectors, such as energy and infrastructure, continue to drive demand for steel, indicating that while the overall market is soft, opportunities still exist in specific regions and industries [15][20] Future Outlook - The overall sentiment for flatbed freight heading into 2026 is one of caution, with expectations of a slow recovery in both lumber and steel markets [17][20] - The best opportunities for flatbed carriers will likely shift away from residential construction towards non-residential projects that are less sensitive to interest rates, such as utility infrastructure and industrial builds [18][20] - Carriers are advised to adapt to the changing landscape by broadening their service areas and focusing on sectors that continue to show demand despite the cooling housing market [10][18]

Core Points - The recent announcement of a 10% tariff on Canadian goods by President Trump was triggered by an Ontario ad campaign featuring Ronald Reagan, which Trump labeled as a "hostile act" [1][2] - The Canadian dollar experienced a slight depreciation against the U.S. dollar, but the overall market response was muted, with the S&P/TSX Composite Index showing resilience [3][4] - Specific sectors in Canada, particularly auto, steel, aluminum, and lumber, are more vulnerable to tariff impacts, with potential costs to American consumers estimated at $50 billion [5][6] Market Reactions - The Canadian dollar (CAD) saw a slight depreciation, with the USD/CAD exchange rate approaching 1.3980, reflecting a 50-pip spike post-announcement [3] - U.S. equity futures were mixed, but major indices like the Dow Jones Industrial Average and S&P 500 reached record highs on the same day as the tariff announcement, attributed to softer inflation data [4] - Analysts view the tariff announcement as typical political maneuvering rather than a serious threat to trade relationships, indicating a level of desensitization among investors [6][10] Sector-Specific Impacts - Industries with significant cross-border trade exposure, such as automotive and energy, are on high alert due to the potential for increased costs and market volatility [5][6] - The Canadian Chamber of Commerce emphasized that tariffs are ultimately a tax on American consumers and competitiveness [7] Broader Trade Context - The tariff announcement occurs amid ongoing trade tensions, including investigations into China's compliance with trade agreements and threats of new tariffs on Chinese goods [9] - The frequency and rhetoric of trade policy announcements have led to a market environment where investors are increasingly able to filter out noise and focus on other economic indicators [10][11]

Performance Overview - The Third Avenue Value Fund achieved a return of 11.85% for the quarter ending September 30, 2025, outperforming the MSCI World Index (7.36%) and the MSCI World Value Index (5.98%) [2] - Year-to-date, the Fund returned 26.04%, compared to 17.83% for the MSCI World Index and 17.54% for the MSCI World Value Index [2] - Annualized performance for the trailing three-year and five-year periods was 23.24% and 23.66%, respectively [2] Key Contributors to Performance - Capstone Copper was the largest contributor, benefiting from the expansion of its Mantoverde mine and rising copper prices due to tight global supplies and operational disruptions in major mining regions [3] - Lundin Mining also contributed positively, aided by rising copper and gold prices, with its Brazilian copper mine being a significant asset [3] - Warrior Met Coal's Blue Creek project began production ahead of schedule, expected to significantly increase production volumes and reduce costs [4] - Close Brothers benefited from a favorable U.K. Supreme Court ruling, improving the outlook for U.K. lenders involved in motor finance [5] Negative Contributors to Performance - Negative contributions were limited, with easyJet, Ayala Corp., S4 Capital, Interfor, and Boise Cascade noted as underperformers [7] - Boise Cascade and Interfor are exposed to the cyclical downturn in U.S. housing starts and repair activity, presenting potential opportunities for undervalued investments [7] Investment Themes - European companies were significant contributors to performance, with Deutsche Bank and Bank of Ireland showing improved health and operating performance [8][9] - The Fund reduced its position in Deutsche Bank despite its strong performance, indicating a strategic shift in investment focus [9] New Investments - The Fund initiated positions in Boise Cascade, Rogers Corp., and Ayala Corp. during the quarter [32] - Boise Cascade is viewed as inexpensive with potential for recovery in housing-related demand, supported by a strong financial position [34] - Rogers Corporation has valuable intellectual property but has struggled to grow; recent management changes may enhance its competitive position [38] - Ayala Corp. is trading at multi-decade low valuations, with potential catalysts for value creation through asset monetizations and share repurchases [40][41]

Core Insights - GreenFirst Forest Products Inc. welcomes the restart of operations at Kap Paper Inc., emphasizing collaboration between federal and provincial governments to support Northern Ontario communities and the forestry sector [1][2][3] Group 1: Company Developments - The resumption of operations at Kap Paper is expected to stabilize the supply and use of sawmill residues in Northeastern Ontario, addressing challenges in the lumber industry [2] - GreenFirst's CEO, Joël Fournier, expressed gratitude towards government support, highlighting the stability this decision brings to communities and the foundation it lays for business growth in Northern Ontario [3] - The federal government and Kap Paper leadership are exploring a long-term project to transform the paper mill into a more competitive and sustainable facility [3] Group 2: Industry Context - The restart of Kap Paper operations is crucial for stabilizing the forestry sector in Northeastern Ontario, which has faced significant challenges [2][7] - GreenFirst operates four sawmills across 6.1 million hectares of FSC® certified public Ontario forestlands, focusing on sustainable forest management and lumber production [4]

The biggest blow will fall on Canada. The two countries have been locked in a decades-long dispute over US claims that Canada unfairly subsidizes its lumber industry and sells the commodity below market rates.Here's what to know 👇 https://t.co/sV55gFvtnJ ...

Core Viewpoint - Rayonier announced the acquisition of PotlatchDeltic in an all-stock deal, valuing the combined company at $7.1 billion, or $8.2 billion including debt, creating one of the largest lumber companies in the US [1] Industry Overview - The timber industry is facing significant challenges in 2025, with fluctuating prices due to tariffs and trade war uncertainties, alongside crashing demand from a stagnant housing market [2] - Lumber futures dropped 24% from a three-year high in August to a seven-month low in September, with the US Lumber Coalition describing the current market conditions as the worst ever [3] Tariffs Impact - A new round of tariffs on imported lumber and wood products is expected to significantly impact Canada's lumber industry, with softwood lumber facing an effective tariff rate of 45% [3] - The protectionist measures could potentially benefit Rayonier and PotlatchDeltic, both operating as REITs, by bolstering their market position [3] Strategic Advantages - The merger will result in the combined ownership of 4.2 million acres of timberland across 11 states, along with seven wood product manufacturing sites and six lumber mills, positioning the new entity as the second-largest timberland owner in the US [6] - Both companies have also leased land to solar farm developers, with these deals projected to be ten times more profitable than traditional timber operations [4]

Trade Dispute - US and Canada are engaged in a decades-long dispute regarding lumber industry subsidies and below-market sales [1] - The biggest impact of the dispute is expected to be on Canada [1]