Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Nov. 10, 2017.
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.
Demand for SPF remained solid, exacerbated by limited volumes available for timely shipment. Western mills often reported order files well into next month. Producers wanting more control over order files offered limited volumes. Quotes raised aggressively to cover final duty amounts essentially removed those volumes from the market.
- Southern Pine lumber sales activity remained solid, affording mills an opportunity to clear excesses and build order files. Upward price volatility was limited. Buying was measured, as yards considered seasonal market influences.
- Coastal species producers were forced to lower #2&Btr Doug Fir prices in both green and dry. Meanwhile, good demand on the back of strong SPF pricing kept upward pressure on Hem-Fir prices. Inland lumber offices have been skeletonized by the NAWLA Meeting in Chicago this week, but few expect any softening of either demand or prices in the quieter end of the week. Neither Fir-Larch nor Hem-Fir prices wavered much from recent published levels.
- Stud pricing across North America was narrowly mixed, with little upward or downward pressure applied from the demand or supply side.
- Radiata Pine lumber from New Zealand has been significantly more abundant this year, but less so from Chile. Prices have been very stable all year.
- Ponderosa Pine industrials are still difficult for some buyers to access in the volumes they seek. Some producers have not had consistent volumes for the cash market this summer, which has heightened the sense of tight availability. Ponderosa Pine 4/4 Selects and Commons show very little change in price levels, although availability is “Still pretty tight,’ according to one source.
- The annual exodus to the NAWLA Traders Market took place this week, taking many Western Red Cedar traders away from their desks. With many buyers covering their needs prior to the week, sales activity ticked down a notch at sales offices.
OSB pricing took another week of big tumbles as the market continues to come off from lofty levels. A few sources said they feel stabilization may be a week or two away, while others find the current trend unpredictable. Prices in some regions range broadly.
- Sales activity in the Southern Pine plywood market picked up after a slow start, prompting producers to report a modestly improved week of sales overall. Buyers purchased for shipment in the week of November 20, although quicker shipping volumes did remain available.
- Price weakness persisted in the Western Fir plywood market. Mills lowered CDX quotes and negotiated off those levels to stay ahead of production. Order files extended into the week of November 20, but quicker shipping wood was available.
- Canadian plywood markets continued their firming trend this week after a recent sharp drop in pricing. Activity is serene but steady, and producers pushed order files out again, with most into the weeks of Nov. 27 through Dec. 4. One producer is out to Dec. 11.
- Little change appeared in either Particleboard or MDF markets. Activity for both products remained lackluster at the mill level. Typical seasonal slowing was blamed for the modest pace.
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USG to acquire maker of specialty ceilings products
USG Corporation, the Chicago-based building products giant, reported that it has entered into a definitive agreement to acquire Ceilings Plus, a leading manufacturer of specialty ceilings products.
Upon closing, USG said it will pay approximately $52 million in cash, on a cash-free and debt-free basis. The pending transaction, which is subject to customary closing conditions, is expected to close by the end of 2017.
“The addition of Ceilings Plus is expected to further expand USG’s product portfolio, accelerate innovation and enhance our presence in the high-growth Specialty Ceilings market,” said Jennifer Scanlon, president and CEO of USG Corporation. “I believe this acquisition will increase our penetration into architectural specifications and enable cross-selling opportunities for USG’s existing tile and grid ceiling products.”
Ceilings Plus employs more than 150 people at two facilities in California and Georgia and is forecast to generate 2017 sales in excess of $45 million. Company founder and president Nancy Mercolino will continue to lead the business and be based in Los Angeles, USG said.
Home Depot posts a $25 billion quarter
The world’s largest home improvement retailer posted third quarter sales of $25 billion, up 8.1% from the same quarter last year. Comparable store sales in the U.S were positive 7.7%.
The Atlanta-based giant said hurricanes and other disasters boosted comparable store sales growth by about $282 million, but the gross-margin on hurricane-related sales was considerably lower than the company average.
Net earnings increased 10.0% to $2.165 billion.
"Though this quarter was marked by an unprecedented number of natural disasters, including multiple hurricanes, wildfires in the West, and earthquakes in Mexico, the underlying health of our core business remains solid," said Craig Menear, chairman, CEO and president. "I am proud of our team and suppliers for their extraordinary efforts to support those in the path of the various natural disasters throughout the quarter. Our support of the impacted communities continues."
Based on its year-to-date performance, underlying strength of the core business, and projected hurricane recovery sales, the company lifted its fiscal 2017 sales growth guidance and now expects sales will be up approximately 6.3% and comp sales will be up approximately 6.5%.
The company increased its store count by one unit in the third quarter, bringing its footprint to a total of 2,283.