Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Jan. 11, 2013
*Western – regional species perimeter foundation; Southern – regional species slab construction.
Crow’s Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.
Lumber: Trading activity in the SPF lumber market was stagnant, leading to generally flat pricing. Producers showed order files still out into the weeks of Jan. 21 and 28, extending beyond the expiration of January’s futures contract. Southern Pine lumber mills and secondaries both reported good sales activity for most items. Solid demand, decent weather in most part of the Southeast and limited offerings from mills all contributed to higher prices. Buyers reentering the Coastal species lumber market on a consistent basis, having to purchase for the next round of buyers they will sell to, continued to place upward pressure on prices. Rising log prices remained a concern. Inland species lumber producers reported a modest start, but activity improved as the week progressed. Limited offerings and good order files helped producers move prices up. Secondaries sold off previous purchases at or slightly above replacement costs. Activity for Radiata Pine Mldg&Btr was steady, with supplies limited and prices firm. Improved activity for blanks sent those prices higher. Ponderosa Pine Mldg&Btr sales remained steady but uneventful. Buyers only bought what they needed and then only after shopping to find the best price. Others relied on their contracts to keep them in stock. Ponderosa Pine producers reported an increase in activity for boards, especially narrows. Eastern White Pine producers reported a good week of sales, with Industrial leading the way. Standard sales were also good. Limited supplies of ESLP and Idaho White Pine kept sales volumes light but prices firm. Western Red Cedar pricing continued to creep higher, mostly due to tight supplies available for the first quarter. Constricted fiber supplies are creating spotty production cutbacks.
Panels: The market for OSB remains tight, although buyer resistance is increasing as prices escalate. A two-tier market was present in some regions, as wholesalers sold off positions at below replacement costs. The Southern Pine plywood market remained fluid, keeping lead times at mills extended and pushing prices higher. Wholesalers sold at various price levels below replacement costs and were able to match mill prices for the quickest shipping volumes. Western Fir plywood producers experienced lackluster sales activity, while secondaries sold quicker shipping volumes below replacement prices. Buyers were both satisfied with volumes purchased previously and skittish over high price levels. Buyers of Canadian plywood who measured the need for additional purchases against robust pricing and extended mill order files often found themselves on the fence. Particleboard and MDF mills in both the East and West experienced increases in market activity. Various market segments, including moulding manufacturers, stepped up their purchases.
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Retail imports to increase while longshoremen strike looms
Import cargo volume at the nation’s major retail container ports is expected to increase 2.3% in January over the same month last year, according to the monthly Global Port Tracker report by the National Retail Federation and Hackett Associates.
Meanwhile, port workers say they’re ready to strike at East Coast and Gulf Coast docks.
“The strike deadline came and went at the end of December, but the threat of closing down nearly half our nation’s port capacity has only been postponed, not eliminated,” said Jonathan Gold, VP supply chain and customs policy for the NRF. “The uncertainty of what will happen in February has retailers implementing expensive contingency plans yet again and is a burden our economy cannot afford.”
The latest extension of contract talks between the International Longshoremen’s Association and the U.S. Maritime Alliance runs through Feb. 6 and comes after previous strike deadlines in September and October. The union and management are scheduled to meet next week under the supervision of federal mediators, but the ILA walked away from local talks affecting the Ports of New York and New Jersey earlier this week. A strike would close 14 ports from Maine to Texas where nearly 15,000 dockworkers handle 40% of the nation’s ocean cargo.
U.S. ports followed by Global Port Tracker handled 1.25 million Twenty-foot Equivalent Units (TEU) in November, the latest month for which after-the-fact numbers are available. With most holiday merchandise already in the country, that figure was down 8.6% from October, and down 2.8% from November 2011. One TEU is one 20-foot cargo container or its equivalent.
December was estimated at 1.3 million TEU, up 6.5% from last year. January is forecast at 1.31 million TEU, up 2.3% from January 2012. February is projected at 1.15 million TEU, up 6%, and March at 1.25 million TEU, up 0.5%. April and May are expected at 1.33 million TEU (a 1.7% rise) and 1.42 million TEU (3.4% increase), respectively.
The first half of 2012 totaled 7.7 million TEU, up 3% from the same period last year. For the full year, 2012 was estimated at 15.8 million TEU, up 2.9% from 2011.
Hackett Associates Founder Ben Hackett said there were signs that retailers brought merchandise into the country early as the ILA’s Dec. 29 strike deadline approached.
“We have seen a rise in the level of the retail inventory-to-sales ratio,” Hackett said. “This may be a reflection of importers stocking up ahead of the East Coast/Gulf coast port strike that was expected, though the run-up came well ahead of that.”
Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the U.S. ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the East Coast; and Houston on the Gulf Coast.
Bosch gets the nod from Consumer Reports
Consumer Reports has given its No. 1 ranking and “Best Buy” rating to Bosch dishwashers in its most recent edition. Six models of the German-engineered appliances were featured on the magazine’s recommended list.
Bosch entered the dishwasher market in 1991. The Irvine, Calif.-based manufacturer makes an assortment of models that range from an all-plastic tub to a fully featured stainless steel tub.
“We are honored by this top recognition and proud to continue our commitment to quality across our line," said Stephanie Hutaff, director of product marketing, dishwashers for Bosch home appliances.