Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Feb. 15, 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: SPF trading was moderate and steady, which led to higher prices for the second consecutive week. Volumes sold were not near those sold the week prior. The need to purchase again outweighed caution generated by high prices. Sales in the Southern Pine lumber market slowed compared to trading the prior week, when buyers purchased much of the market’s February supply. Order files extending two to four weeks and sometimes longer and enough sales activity to sell another week of production prompted higher prices. Coastal species lumber continued to sell from mills at a strong pace, and secondaries moved their wood through the system steadily. Higher prices prompted some pushback from buyers, but the need to purchase often took a backseat to any protestations. Strength and control of the Inland species lumber market remained in the hands of producers. Limited on hand inventories and order files as far out as mid-March, along with continued buyer interest, allowed mill prices to increase. Offerings of Radiata Pine were light for Mldg&Btr and practically non-existent for Shop grades, as producers were able to garner better returns in markets outside North America. Ponderosa Pine producers reported modest inquiry and sales, as buyers stepped in to cover some of their needs. Supplies of Ponderosa Pine boards remained thin and producers priced defensively. Eastern White Pine reported business was back to normal after the big snowstorm. They reported steady sales and firm pricing. Industrial was difficult to find. Western Red Cedar mills continued to ship orders to customers placed back in late 2012 and took new orders for shipment as far out as June. A fair amount of inquiry for quicker shipping product circled the market, although producers had little to offer.
Panels: The OSB market in all regions continued to strengthen. Mill order files into late March, or even early April, were reported. Buyers turned to secondaries with contract wood to cover much of their immediate needs. Steady sales sent Southern Pine plywood prices higher. Wholesalers purchased moderate volumes with lead times out into mid March after selling near replacement costs. Yards continued to purchase at a steady pace. The sales pace in the Western Fir plywood market slowed considerably. Order files extended into early March, but spotty volumes of various items were still available for the week of Feb. 25 and as early as Feb. 18. The volume of sales in Canadian plywood was light. Buyers who had made earlier purchases stayed on the sidelines. However, distributers reported good product flow from their yards. Aside from the spotty surge in sales occurring at a few mills, particleboard demand remained on par with previous weeks this year. In MDF, recent price increases have taken hold, establishing new market price levels.
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Home builder confidence slips slightly in February
Hovering in the same three-point range during the past four months, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) slipped a point in February.
The measure of builder confidence declined from 47 in January to 46 in February, according to the data released Tuesday morning.
“This is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it’s also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens,” said NAHB chairman Rick Judson, a home builder from Charlotte, N.C.
The decline in the index marked the first slip since April.
Three-month moving averages for each region’s HMI score were mixed in February, with the Northeast up three points to 39; the West up four points to 55; and the Midwest and South each down two points, to 48 and 47, respectively.
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Trex Co. swings to profit in fiscal 2012
A recovering housing market has the alternative-wood producer Trex Co. anticipating gains in 2013. While fourth-quarter sales declined, the Winchester, Va.-based company narrowed its fourth-quarter loss and exceeded its internal expectations.
Trex Co. posted fourth-quarter sales of $46.2 million, down from $51.5 million in the same quarter last year. The company also posted a loss of $3.6 million for the quarter, compared with a loss of $18.3 million in the same quarter last year.
President and CEO Ronald Kaplan pointed to the positive side of the numbers. "We brought 2012 to a successful close with a solid fourth quarter,” he said. “We exceeded our revenue guidance for the period and achieved sales growth of 15% for the year."
For the full year, the company’s net sales were $307.4 million, up from $266.8 million in the previous year. Net income totaled $2.7 million compared with a net loss of $11.6 million in the prior year.
"We believe we are well positioned for 2013, during which we expect to benefit from the growing momentum in the housing sector," Kaplan added.
The company offers decking
The company offers decking products, including Trex Transcend and Trex Enhance protective shells for protection against fading, staining, and scratching; Trex Accents that provides a smooth surface on one side and subtle wood grain on the other; Trex Escapes, a cellular PVC deck board; and Trex Hideaway, a hidden fastening system for specially grooved boards. -Scott Sohr