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Market Recap: RISI Crow’s Construction Materials Cost Index

BY HBSDEALER Staff

A price index of lumber and panels used in actual construction for Jan. 13, 2012

*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: Buyers showed little interest in purchasing SPF volumes prior to the expiration of January’s futures contract on Friday. A March contract trading below January’s was given much of the credit for slow trading. Buyers reported little desire among mills to ex-pit, even though mill order files were quickly eroding. Southern Pine lumber producers experienced what many deemed "good follow-through" from increased demand levels the week prior. As a result, dimension prices again increased by double digits. Buyers scoured the market for 2×12 #2, but tight supplies made that dimension difficult to source. Lumber traders in the Coastal market experienced a solid week of trading. Producers sold relatively strong volumes, while wholesalers managed to sell from positions at a good clip. Prices throughout both dry and green items rarely adjusted more than $5. Long lengths remained strong, prompting higher price levels. Hem-Fir/White Fir remained the bright spot in the Inland lumber market while Fir-Larch struggled to get traction. Limited Ponderosa Pine production helped keep prices firm in Selects and Commons. Mills with good selection were able to hold or, in some instances, move prices up slightly. Limited volumes of Idaho White Pine were available, and most consisted of scattered tallies. Prices were mostly unchanged. Eastern White Pine sales were light but steady, and prices were close to last week’s levels. Sellers of Radiata Pine Mldg&Btr and Shop reported a quiet pace to the market, but prices remained at published levels. Availability of Shop was still tight. Western Red Cedar sales were slow yet steady, helped by continued mild winter weather throughout much of the United States and Canada. Prices held overall. Production ramped up to cover both orders and forecasted sales for the first quarter.

Panels: OSB producers reported a strong finish to the market, more in the West than the East. Availability at week’s end was limited, as some mills went off the market. Order files were out as far as Feb. 6. Although not at the pace as the previous week, demand for Southern Pine plywood was strong enough to propel many rated sheathing prices $15 to $25 higher. Other increases exceeded that range by a wide margin. More producers moved order files into early February. Sales activity slowed in the Western Fir plywood market from the more frenetic pace a week earlier, although selling a week’s worth of production was accomplished. Order files in the weeks of Jan. 23 and 30 were common. Sales in the Canadian plywood market were made at levels above and below the most recent published price. MDF and particleboard customers continued to replenish inventories at the beginning of the new year, seeing their own orders increase.

For more on RISI, click here

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Advice for ProBuild’s incoming chief executive

BY HBSDEALER Staff

One of the top stories this week was the introduction of Robert Marchbank as CEO of Denver-based ProBuild Holdings. Marchbank is s former executive with Wolseley, where he led European businesses, among other positions.

It’s difficult to exaggerate the industry’s interest in Marchbank’s and ProBuild’s next steps. Here are some comments received by Home Channel News, which were solicited by an item in HCN Tuesday (Note: ProBuild is currently owned by Fidelity, and Stock Building Supply was formerly owned by Wolseley):

"It seems to me that what Robert Marchbank ought to do first includes an amalgamation of the following:

 • Secure agreement from the Johnson Family at Fidelity regarding how quickly he can move, how drastically he can cut, and what prior investments and strategies that Fidelity will allow them to walk away from.

• Figure out who is left on the team that has any field experience.

• Determine whether ProEdge is a source of technological advantage or is an albatross around the neck of the people in the field. If it needs to go, then convince Fidelity that they need to cut their losses. 

• Quickly analyze which yards need to be closed, and close these within weeks, not months, once they know 75% of the answer.

• Focus on bringing entrepreneurial spirit back through profit sharing with field units, and having those units insist on getting a market price that doesn’t continue the trend of negative net income."
— Name withheld

"Is not Wolseley the same company that put Stock Building Supply in Chapter 11 bankruptcy several years ago?"
— Name withheld

"Will it now be [called] Pro Stock? Kind of catchy."
— Name withheld

“[Here’s] my take on what needs to happen (but probably won’t) for ProBuild to turn their business around. First of all, they need to focus on making a profit, rather than a sale. Second, they need to make business decisions based on satisfying their customers, rather than their investors. Third, they need to look long rather than short term. This is a business built on consistent performance, professionalism and good customer relations. Those aren’t things you can develop in one quarter or even one year. It takes time, money and effort, not just hype, to gain the credibility and loyal customer base you need to be successful in this industry.”
— Calvin Oram

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GAF rolls out Lifetime warranty for roofing systems

BY Ken Clark

Wayne, N.J.-based GAF announced an expansion of its limited Lifetime warranty that goes beyond shingles. It’s called the Lifetime Roofing System program.

In order to qualify for Lifetime limited coverage, a homeowner must install any Lifetime Shingle, as well as three or more qualifying GAF accessories. Contractors can choose from the wide assortment of GAF accessories, including Ridge Caps, Roof Deck Protection, Leak Barriers, Cobra Attic Ventilation and Starter Strips. Details for the Lifetime limited warranty can be found in the new GAF Shingle & Accessory Limited Warranty, which is effective for all installations of GAF asphalt shingles and accessories after Jan. 1, 2012. Lifetime coverage also includes non-prorated coverage for the first 10 years.

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