Canadian timber producer Interfor Ltd has reported a second quarter net loss of C$2.6m (2009: C$14m loss)

The company said higher commodity prices in April and early May were quickly offset by lower activity levels and prices in May and June.

SPF 4×2 dropped as low as US$188 in late June – down from a peak of US$320m in the last two weeks of April.

Higher log prices, particularly in the US further impact the results.

Lumber production rose 7% in the second quarter to 277 million board feet, representing 69% of rated capacity.

Interfor is operating at a reduced capacity in the US due to the higher log prices and reduced activity in hem-fir product lines.

The Grand Forks sawmill was curtailed for the first two weeks of July and the Hammond Cedar mill will be curtailed for two weeks at the end of July.

But a new credit facility will allow Interfor to increase the cost-efficiency and cost structure of some of its mills in a C$24m capital programme.