Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for July 12, 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: The pace of sales activity in the SPF lumber market increased, allowing producers to raise prices, particularly narrow width levels. Wholesalers purchased speculative volumes early or at midweek which, combined with a down move in futures on Thursday, generated some nervousness among them. The Southern Pine lumber market continued to gather strength, led by double-digit price gains in the West zone. In addition to buyers opening up their PO books once again, a lack of truck availability continued to impact the supply side of the market. Most trading in the Coastal species lumber market “perked up.” Buyers covered specific needs and generally wanted quick shipment. Wholesalers purchased greater speculative volumes. The transition from a dull and slack market to something more vibrant continues for Inland lumber species. Having bottomed two weeks ago, it took over a week for the reality of better prices to sink into the thinking of some buyers. Radiata Pine pricing was stable and firm, although 5/4 Mldg&Btr moved up slightly. Radiata Shop is now selling for September delivery and is very firmly priced. Ponderosa Pine industrial lumber continues to be firm, with Shop showing further upward momentum. Both 5/4 and 6/4 Mldg&Btr are good, with 6/4 slightly stronger. Ponderosa Pine board producers report better demand and mill-level activity in all Common boards. Some questions remain with regard to the strength of Ponderosa Pine #3 Common narrows, because of the volume being produced in the Black Hills. Eastern White Pine producers report their ability to lift prices modestly, most gains being $5, with some stronger gains in the wides. Western Red Cedar producers reported little change in the market, which equated to steady sales. Buyers often filled needs by ordering truckload volumes consisting of numerous items. Prices remained flat overall, with only minor adjustments.
Panels: OSB is being as chaotic in its recovery as it was in its decline. No one denies that this has been a week of sizable improvements, but no one agrees with others as to the extent of the recovery. Southern Pine plywood mills, some able to push order files out into the first half of August, raised prices throughout the week in $5 increments. Much of the volume purchased early by wholesalers had destinations on it. Trading picked up markedly in the Western Fir plywood market, sending prices higher. Mills experienced strong participation out of several regions of the country, including California, the Midwest and the Northeast. Canadian plywood spent this week consolidating agreement on new and much stronger levels. Producers seized the opportunity to move their prices aggressively, and buyers came along for most of the move. Slower particleboard purchasing by customers around the Fourth of July holiday left producers with a little less order file. MDF buyers noted a little more availability, while producers generally reported steady sales.
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Retail trade sales up 0.6% in June
The U.S. Census Bureau reported retail trade sales increased 0.6% in June, compared May.
Sales were up 6.0% when compared to June 2012.
The figures were released Monday morning and are adjusted for seasonal variation and holiday and trading-day differences, but not for price changes. The figures exclude automobiles, gas stations and restaurants.
Advance sales for businesses classified as "building material and garden equipment and supplies dealers" (NAICS 444) were $25.77 billion in June on an adjusted basis. That’s down 2.2% from $26.35 billion in May, but up 9.4% from the same month one year ago.
The data released Monday morning also shows Americans are buying more cars and buying merchandise over the web. Nonstore retailers were up 13.8% compared to a year ago. Auto and other motor vehicle dealers were up 12.9% compared to the same month last year.
The CEO of the National Retail Federation said things could be worse and better. "Consumers remain wary," said Matthew Shay. "Even though healthy home prices and stock values are helping to improve confidence and spending, stagnantly high unemployment, higher taxes and lingering policy uncertainty continue to keep shoppers and economic growth at bay. The recovery is solid and good but its pace remains measured and modest."