Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Feb. 25, 2011
*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 lumber prices held up reasonably well in the East, despite a lack of trading. In the West, some quotes were lowered to attract more sales, but producers exhibited little urgency to reduce prices more than $6. Good weather throughout much of the Southeast brought Southern Pine lumber buyers back in to cover needs, just not in the same numbers as the prior week. As a result, most #2 prices continued their upswing, some by double digits. Trading lacked energy in the Coastal species lumber market, but most prices were firm or edged modestly higher. Slight improvements in the Inland species #2&Btr lumber markets kept upward pressure on the upper grades. Both Select Structural lumber and MSR moved slightly higher. Ponderosa Pine Mldg&Btr has been raised in price by some key producers. Shop prices continue to firm gradually in all #2&Btr Shop items, but #3 Shop is stable. Selects and Commons are being led by #2 Common at this point. Most board producers, however, have significant gaps in their inventories, so much of the highly specified, highly mixed orders being sought are being turned away. Eastern White Pine mills also report good retail action in recent days — the gift of slightly improved weather. Both Radiata Pine Mldg&Btr and Shop are under pressure for price increases. The sales pace in Western Red Cedar markets, still hampered by lingering winter weather in several regions within the eastern half of the United States, continued to flounder.
PANELS: The Western Fir plywood market lacked energy. Producers needing to move blocks into the distribution channel did so with discounts of $10 to $20 before moving quotes back up to previous levels. Producers focusing all their efforts on producing Southern Pine rated sheathing reported modest sales. Escalating demand for higher grades gained momentum, generating mill order files and higher prices. The few places that have decent weather have very poor OSB demand, creating some aggressive action among a few wholesalers. The need to move contracts has motivated them to seek sales, and most have to go below mill-asking levels to achieve those sales. The majority of comments about Canadian plywood this week involved some variation on the theme of quietness. Thus, the C$304 for 9.5 mm CSP sheathing delivered to Toronto remains the baseline. The overall situation in particleboard and MDF markets remains defined primarily by too many commodities for too few buyers. Nonetheless, "Mills are holding their own," according to one source, and they are not calling to make deals.
Source: RISI’s Crow’s Weekly Market Report
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Lowe’s edged out in Long Island
Lowe’s has lost a zoning battle to put a new store in East Hills, N.Y., on the North Shore of Long Island, according to an article in Newsday. Instead, the building will house a real estate investment firm.
Community opposition to the store, and the mayor’s refusal to back rezoning from light industrial to commercial, doomed the project, according to the article. A year after buying the property, Lowe’s put it up for sale.
Steel Equities agreed last month to make a deal with the North Carolina home improvement retailer, which paid Pall Corp., a maker of filtration products, $40 million in 2008 for the land.
The contract price was not disclosed, but officials said the price for the 18-acre parcel was less than $40 million.
Sears appoints new CEO, Q4 profits fall
Sears Holdings Corp. has named a former technology executive as its new chief executive. The struggling retailer’s three-year search for a permanent CEO came to an end with the announcement on Wednesday that it has appointed Lou D’Ambrosio as chief executive and president. He will assume the office and join Sears’ board on Feb. 24.
D’Ambrosio, 46, served as CEO of telecommunications software company Avaya from 2006 to 2008, before stepping down for medical reasons. Prior to that, he spent 16 years at IBM, holding executive posts in sales, software and global services. D’Ambrosio, who has no direct retail experience, has been working as a consultant to Sears’ board of directors for the past six months.
D’Ambrosio takes the company’s reins from W. Bruce Johnson, who has been serving as interim CEO. Johnson had replaced Aylwin Lewis, who stepped down in February 2008 amid falling sales and profits. Johnson will become executive VP of Sears’ off-mall businesses and supply chain.
The company is controlled by billionaire financier Edward Lampert, who acquired Kmart in 2003 and later bought Sears, Roebuck & Co. to form Sears Holdings.
In a statement, Lampert said: "From the beginning of our CEO search, we were determined to find a leader with information and technology experience who could catalyze the transformation of our portfolio of businesses in the context of the evolution of the retail industry that is occurring more broadly. Having worked closely with Lou and observing his business acumen, compelling leadership style, performance orientation and Customer First approach, I am confident that Lou is the right person to lead and transform Sears Holdings. Lou is a proven winner and I am excited to have him as the leader of our company."
In other news, Sears reported that its fourth-quarter net income dropped 13% to $374 million, from $430 million a year earlier. However, adjusted results topped Wall Street estimates and signaled the retailer’s first profit since the first quarter.
Revenue edged down 1% for the quarter ended Jan. 29 to $13.14 billion, but beat Wall Street’s expected $13.02 billion.
Same-store sales fell 1.2%, dragged down by a 4.5% drop-off at Sears. The Kmart arm continues to gain strength, as same-store sales for the period rose 2.5%