Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for April 29, 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 mills across Canada struggled to sell production into a distribution system plagued with slow takeaways. Mills in the West struggled just to fill allotted railcars. Single-digit discounting dominated the Southern Pine lumber market. Weakest among the dimensions was still 2×6 #2, if not for the depth of its discounts, then for the difficulty mills had moving the item. Liquidity generated from considerable discounts reduced dry lumber buildups at Coastal species mills. Not all mills were willing to participate at the low price levels. Green Doug Fir sales were sluggish, but most producers were not forced to lower prices severely. Inland species lumber producers have seen their market prices put under intense pressure in the last two weeks. The primary sources of this pressure have been lumber futures trading and soft prices for Canadian and Coastal lumber. Ponderosa Pine 5/4 Mldg&Btr remains at $1,350. With regard to Shop, 6/4 is slightly stronger in #2&Btr than is 5/4, but neither is aggressive in price. Although some producers show volumes of #3 narrows to move, others are content to maintain a stable price picture. All #4 Common items are unchanged and firm, as are Selects for the time being. Both ESLP and Idaho White Pine boards are firm at established levels. Eastern White Pine has been waiting for the weather to catch up with the market, which it appears to be doing in a gradual way. Radiata Pine Mldg&Btr and Shop are on hold with regard to prices. Western Red Cedar prices as a whole remained fairly static. Demand was steady but light. Sales to big-box stores were consistent.
PANELS: Western Fir plywood mills reported slightly greater sales volumes than the previous few weeks, but not enough to keep CDX and underlayment prices from drifting lower. Southern Pine plywood sales increased in the latter half of the week. Early price weakness in rated sheathing firmed as producers moved order files as far as the week of May 9. While some discounting has taken place, most OSB producers are trying to keep numbers firm. The current levels erase any real downside risk, but buyers do not consider these investment levels because they do not need wood. As reflected in reported Canadian plywood prices earlier this week, discounting did result in lower numbers, with C$306 being the new baseline. Particleboard and MDF prices in both the West and South are stable and firm, although portions of the West remain inordinately competitive.
Source: RISI’s Crow’s Weekly Market Report
DMT receives seal of approval
DMT Diamond Machining Technology, based in Marlborough, Mass., has received the Seal of Approval from the National Home Gardening Club for its Diafold Diamond Flat File.
DMT provided its Diafold Diamond Flat Files to 87 members to the club for testing during the summer and fall of 2010.
Sales, earnings rise at Whirlpool
Whirlpool Corp., the Benton Harbor, Mich., appliance maker reported sales of $4.4 billion for its first fiscal quarter, a 3% rise over sales of $4.3 billion in the first quarter of 2010. Earnings for the worldwide manufacturer were $169 million for the quarter, compared with $164 million a year ago.
"Our first-quarter results reflect our ongoing cost reduction efforts and continued innovation investments, which helped to mitigate significant material cost inflation," said Jeff Fettig, chairman and CEO of Whirlpool Corp.
In the North American division, Whirlpool posted first-quarter sales of $2.3 billion, up slightly from the prior year. North America unit shipments increased approximately 4%. The North America region reported operating profit of $59 million compared with $94 million in the previous year. Results were favorably impacted by cost reduction and productivity initiatives and foreign exchange fluctuations. These factors were offset by lower product price/mix and higher material costs.
Based on the current economic outlook, Whirlpool continues to expect full-year 2011 U.S. industry unit shipments to increase between 2% and 3%.
"Despite a substantial increase in material and oil-related cost inflation, we are maintaining our full-year earnings and cash flow outlook," Fettig said. "We have implemented cost-based price increases in many regions around the world, continue to introduce a strong cadence of innovative new products and remain focused on accelerating our cost reduction and productivity improvements to manage higher material cost inflation."