Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Aug. 22, 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: Most SPF lumber prices moved to higher levels. One of the factors influencing pricing is steady contract volumes western Canadian producers are shipping to China. Despite hesitation among buyers, need has outweighed caution. Mills offered 2×6 intermittently to customers and sold to them readily, going off the market as a result. Demand for Southern Pine lumber remained strong overall, although several producers reported lighter sales activity than the prior week. Limited demand at the mill level was largely due to order files extended two weeks or beyond and buyers wanting quicker shipping volumes than mills could provide. Coastal species producers reported solid demand from customers for dry items, prompting price increases for several of those items. Green Doug Fir pricing, particularly in narrow widths, was tame in comparison. Inland lumber producers continue to report, “Prices keep moving up,” despite the lack of any strong buying surge. Buyers have tuned their order placement to short cycles, hoping to see prices moderate and offer a buying opportunity. Despite limited sales activity, some Western Red Cedar producers reported that demand was relatively good for the month of August. Demand continued to pull enough volumes from mills to keep producers’ inventories thin. Radiata Pine lumber prices remain stable. New Zealand sourced Mldg&Btr remains separated from Chilean stock by about $25 on the upside. Radiata Pine board prices held. Ponderosa Pine prices that resulted from prior weeks’ discounts remain in place in both Mldg&Bgtr and #3 Shop. The combined pressure of modest buying and more than ample Ponderosa Pine board production have generated some softening. Other western species held very near recent levels, while Eastern White Pine was largely marketed on existing relationships.
Panels: Distributors hoping to see significant concessions in OSB pricing this week were somewhat disappointed by still-tight trading ranges, which have defined the market’s nature for a couple months now. North Central and Mid-Atlantic mill pricing picked up a modicum of strength while Southeast, Southwest, and Canadian levels declined slightly. High Southern Pine plywood prices and some willingness on the part of producers to lower rated sheathing quotes and listen to counters prompted buyers to hold off buying another week when possible. Buyers unable to wait often bought at moderately lower prices. Western Fir plywood mills began the week listening to counters for sheathing, willing to take some lower numbers to garner more sales at the current high price levels. Meanwhile, most buyers entered the market very cautiously, aware of the significant downside risk. The Canadian plywood market contained some mixed signals this week, but pricing remained locked on levels established now for a month. Bright spots do exist in off grades, specialty, and sanded panels. Many particleboard and MDF market participants spent the latter half of the week at the International Woodworking Fair in Atlanta. MDF sales remained less robust than particleboard.
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Earnings season shows upswing
Another earnings season has come and gone, but this time things went better for the 30 publicly traded companies tracked by the HCN Stock Watch.
There were more cases of sales growth and more cases of double-digit sales growth in the most recent three-month period, which for most companies was the second quarter.
Twenty-five of the 30 showed sales gains for the period, compared with 21 in the first quarter. Plus, the number of double-digit sales gainers increased from two to seven.
In the most recent round of reporting, which ran from June 6 through Aug. 21, Trex led all sales gainers with a 23% increase.
Other double-digit-sales-gainers were Eagle Materials (up 17%), Boise Cascade (up 13%), Fastenal (up 12.1%), Sherwin-Williams (up 12.1%), Toro Companies (up 11.3%) and Valspar (up 10.5%).
In the first quarter, only two companies had double-digit sales increases — Stock Building Supply and Eagle Materials.
Heading the other direction, Central Garden and Pet and Sears Holdings both reported double-digit decline in their sales in the most recently completed quarter. Sears is the only company on the list to show consecutive quarters of double-digit sales declines.
Home Depot and Lowe’s, far and away the list’s largest revenue generators, both reported a 5.7% sales gain in the second quarter.
Dunston promoted at American Woodmark
Cary Dunston has been named president and COO at American Woodmark Corporation, in which role he will assume the added responsibility for the company’s finance and information technology operations.
"Over the past year, Cary has provided invaluable leadership in rebuilding the organization and meeting the needs of our customers and constituents as the industry continues to recover from the recession," said chairman and CEO Kent Guichard. "Consolidating the additional support functions of finance and information technology will further enhance our ability to align all aspects of the Company in pursuit of the 2019 Vision to set the standard as a world class operation. I look forward to continuing to work with Cary as we drive the organization forward."
American Woodmark is a manufacturer and distributor of kitchen cabinets and vanities, operating via nine manufacturing facilities and nine service centers across the country.
In his most recent role, Dunston was serving as EVP and COO.