Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Dec. 6, 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: Greater urgency to sell production forced SPF lumber mills to lower prices more aggressively to locate trading levels. Some success was achieved at $20 below the prior week’s levels. Buyers needing to purchase did so sparingly, while others saw the weakness as a reason to remain on the sidelines. Sales activity in the Southern Pine lumber market was quiet and described by a few producers as “extremely slow.” Two major contributors to the pause in demand are the whittling down of yard inventories prior to year-end and a major cold front covering much of the U.S. Buyers shied away from the Coastal species market, making it difficult for producers to sell much without lowering prices $15 to $20 — and sometimes more. Lower prices added more fluidity to trading, but producers still struggled to sell production. Inventories of Inland species lumber were light throughout the system. Producers had little in the way of offerings, yards reported limited supplies of straight lengths and wholesalers were out of stock at many of their reloads. Radiata Pine sellers reported steady sales for loads that will deliver in January. Demand for Ponderosa Pine Shop continued to outpace availability, and prices remained strong. Buyers called in any favors they may have with producers in order to garner coverage. Although some producers reported a quieter tone to the market, Ponderosa Pine boards continued to move easily. Any offering of #2&Btr that shipped quickly was sold with little effort. Eastern White Pine producers reported market activity was “still strong,” with order files out several weeks. ESLP sales remained steady, with demand focused on #2&Btr. Western Red Cedar demand was typical for the season. Producers carried little inventory and prodded customers for 2014 projections to make sure enough inventory was available in the spring.
Panels: OSB sales volumes were light in both eastern and western markets. Producers continued to offer shipments for next week, but many were unwilling to offer much in the way of price concessions. Sales activity in Southern Pine plywood was lackluster. Negotiated pricing for some items added to the feel of a moderately weaker market, keeping buyers from purchasing whenever they could wait. A “slow week” was how most Western Fir plywood traders described sales activity. Thin order files forced mills to lower prices wherever necessary, but they did so grudgingly, citing high log and veneer costs. Participation out of the East was minimal. Market activity for Canadian plywood remained light, but producers reported selling a few loads. Mill order files into the first week of January kept many buyers on the sidelines. Those who went looking for quicker shipments were mostly unsuccessful in their attempts. Demand for both particleboard and MDF remained pedestrian, with a seasonal lack of energy in markets. Market participants continued their optimistic outlook for the first quarter of 2014.
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Stanley Black & Decker adds to board
Stanley Black & Decker’s board of directors has added Debra Crew, president of PepsiCo Americas Beverages. Crew joined PepsiCo in 2010 as president of the western region of PepsiCo Europe, and was promoted in 2012.
Prior to PepsiCo, she held a number of management and leadership roles at Mars, Dreyer’s Grand Ice Cream and Kraft Foods.
"Debra Crew brings an impressive record of success with some of the world’s leading consumer products companies, and a broad range of experience in marketing, operations and strategy," said John F. Lundgren, chairman and CEO of Stanley Black & Decker. "Her global perspective coupled with proven commercial capabilities and exposure to world-class innovation planning processes will be of tremendous value as we continue to pursue profitable growth. We welcome Debra enthusiastically and look forward to her contributions."
Crew graduated from the University of Denver with a Bachelor’s degree, earned her MBA from the University of Chicago and previously served as an officer in the United States Army.
Sears Hometown and Outlet Stores Q3 earnings decline
Sears Hometown and Outlet Stores reported mostly negative financial results for the third quarter of fiscal 2013. Net earnings fell about 12% to $7.69 million, from $8.76 million.
A 2% decrease in same-store sales and unfavorable calendar shift due to the 53rd week in fiscal 2012 offset slight growth in net sales to $561.1 million from $556.9 million.
“Sales of home appliances increased during the quarter, while sales of lawn and garden, consumer electronics, and apparel (which is only sold in Outlet Stores) declined,” said Bruce Johnson, CEO and president. “The fourth quarter of 2013 will be the last quarter where we will have a significant negative comparable store sales impact due to our exit from consumer electronics in most stores in our Hometown segment.
"In our Outlet segment, we completed the initial test of franchising and began rolling out this model, which generated higher initial franchise revenues in the quarter and allows us to continue our transition to an asset light, franchised operation. We also completed a successful test of furniture sales in our Outlet stores and have a limited selection of furniture inventory in place across the format for the holiday season. This continues our strategy of shifting our product mix toward higher margin categories, which began last fall with reductions in consumer electronics and expansion in mattresses and tools."