Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for March 14, 2014
*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: Supply buildups at SPF lumber mills and how those volumes would eventually influence the market became a greater concern among traders. Mills continued to receive a small fraction of railcars needed to load the week’s production. Mediocre trading activity left Southern Pine lumber mills with eroding order files and buyers sensing a weakening marketplace. Wholesalers sold volumes well below replacement costs, adding to the perception of a more vulnerable market. Weather remained the prime driver in a market. Decent demand in the Coastal species lumber market kept most dry prices flat but firm or moving slightly higher. Green prices tended to sag under the weight of limited interest from buyers. Lumber prices in the Inland region are firmer. Producers have been focused on narrows, due primarily to the type of log they have been processing. This has created some tight supplies of all 2×8 and wider dimension. Ponderosa Pine Mldg&Btr remains in the balanced state that it has shown for the last year and more. Demand and production are well enough equalized to keep prices stable. Producers of Ponderosa Pine 4/4 boards are unanimous in their assessment that, “The demand for boards is good.” Hottest of all the board products is Ponderosa Pine #3 Common. Even producers who have no board production at this time are being asked daily for products, in the hopes that something might develop. Eastern White Pine continues to be very stable in price, with core customers being the focus of producers’ attentions. ESLP remains steady, with modest adjustments, especially in the lower grades. Western Red Cedar buyers desperate for deliveries swapped railcar shipments for truckloads when possible, depleting flatbed availability. Buyers in the Northeast and Upper Midwest remained quiet.
Panels: Some sizable cracks have appeared in OSB markets, driven primarily by the needs of wholesalers to move wood. This is the case in most regions, including the Pacific Northwest, most of the West and parts of Canada. Discounting is common on the secondary level. The Southern Pine plywood market continued to display balance between supply and demand, even as much of the Northeast and Midwest remained locked in winter weather. Producers edged order files out another week, now into March 24, and maintained prices levels. Order files at Western Fir plywood mills eroded to the point where producers began to negotiate sheathing prices. Aware of the potential for a stronger market as weather improves prompted producers to hold quotes. From there, CDX sales occurred at levels $5-15 lower. Canadian plywood appeared to firm on Tuesday after some discounted sales earlier. Pressure on prices, a result of additional costs incurred by producers, continued to thread its way through particleboard and MDF markets. Some producers have informed their customers of upcoming price increases, many of the increases not taking place until the end of this month or early April.
For more on RISI, click here.
Sears Hometown posts disappointing results
Sears Hometown and Outlet Stores reported discouraging preliminary figures for its fourth quarter and full year ended Feb. 1, 2014.
Bruce Johnson, president and CEO, acknowledged that the results were disappointing, most notably in the Hometown and Hardware segment, where weaker-than-expected holiday sales had an impact. Additionally, severe winter weather did not help the company’s cause, he added.
Net sales for the 13-week period were $602.5 million, down 4.5% year-over-year. Sears’ coffers took a greater hit at the bottom line, where a $3.7 million net income marked a 61.5% decrease compared to the fourth quarter of 2013.
For the full year ended Feb. 1, sales totaled $2.4 billion, down 1.31%. However, at $35.6 million, net income was nearly half that of 2013’s $60.1 million.
Johnson noted that SHO made progress on four key strategic initiatives last quarter. The company opened 30 stores that have performed according to expectations. Additionally, 19 SHO-operated stores were converted to independent dealer and franchisee-operated models. Online and multichannel sales achieved double-digit year-over-year growth, with quarterly sales up nearly 80% at SearsOutlet.com.
"New Outlet sourcing initiatives began to shift our inventory positions in furniture, apparel, and, most importantly, out-of-box appliances, to products that we are confident, when this mix shift is fully realized in 2014, will deliver higher overall merchandise margins than in the fourth quarter of 2013," he added.
32nd Annual Retail Store of the Year
Chain Store Age celebrates the winners of its 32nd annual Retail Store of the Year design competition, which recognizes the best in retail and restaurant design from around the world, as well as achievements in sustainability and in-store digital innovation.
In addition to the overall Store of the Year, awards were given in 24 individual retail categories. In a nod to the quality of the entries, the judges also awarded honorable mention awards in select categories.