Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for July 27, 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: Sales activity in the SPF lumber market remained substantial, generating continued firm pricing for most volumes sold. Wholesalers and producers noted steady sales to both distributor and retail yards in the U.S. Good sales activity in the field prompted yards to purchase solid volumes of Southern Pine lumber from mills to fill in inventories. Buyers reported having to pick from broken tallies at mills. Some buyers sensed slightly slower trading in the West zone. Coastal species lumber prices continued to climb, edging closer or surpassing the previous highs for the year, many set back in early June. Green Doug Fir remained especially strong. Buyers of Inland species lumber found limited selections at the mills. Producers reported broken tallies in small quantities for shipment. Order files for regular tallies were into mid-August or later. Demand for Radiata Pine Shop was light, but offerings were virtually non-existent, so prices remained unchanged. Modest inquiry levels for Mldg&Btr were reported. Ponderosa Pine producers continued to see weakness in upper grades of Shop. Lack of interest from window and cut stock plants contributed to the overall weakness in the market. In boards, a familiar pattern was repeated for another week, as weakness in Ponderosa Pine #2&Btr Commons continued. Sales of low grades were a little more positive, with prices holding their own. Eastern White Pine producers reported a "slow but steady" pace. An uneventful week was reported for ESLP, as tight availability, coupled with modest demand, kept prices within a few dollars either way of previous selling levels. A moderate sales pace in the Western Red Cedar lumber market generated little excitement. Hot weather and vacations occupied the thoughts of suppliers and customers. Demand consisted largely of truckload volumes often made up of several items.
Panels: OSB markets came to life in a big way late in the week. Producers reported strong sales in all regions, with prices moving up quickly. Brisk sales in the Southern Pine plywood market sent prices higher, skyrocketing in some instances, and pushed order files well out into the latter half of August. Mills, especially those on the Eastside, raised prices defensively. Strong sales at the mill level in the Western Fir plywood market generated higher prices and lead times out into the latter half of August. After dipping their toes in the market the week prior, more yards in the Northeast ventured in to replenish inventories. Canadian plywood producers once again reported active inquiries and good sales volumes. MDF strength remained considerably ahead of particleboard. Some particleboard mills sold beyond a week’s worth of production, while a few fell a little short. Meanwhile, MDF bookings were very strong.
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Consumer confidence increases in July
After four months of declining numbers, the Conference Board Consumer Confidence Index improved in July to 65.9, up from 62.7 in June.
A year ago, the July 2011 Consumer Confidence Index stood at 59.2.
"Despite this month’s improvement in confidence, the overall Index remains at historically low levels,” said Lynn Franco, director of economic indicators. “Consumers’ attitude regarding current conditions was little changed in July, but their short-term expectations, which had declined last month, bounced back. However, while consumers expressed greater optimism about short-term business and employment prospects, they have grown more pessimistic about their earnings. Given the current economic environment — in particular the weak labor market — consumer confidence is not likely to gain any significant momentum in the coming months."
Consumers’ appraisal of current conditions eased in July. Those claiming business conditions are "good" declined to 13.8% from 14.2%, while those saying business conditions are "bad" decreased to 34.2% from 35.9%.
Illinois contractor gets 10-year sentence for asbestos violation
An Illinois man whose workers removed and then dumped asbestos-containing insulation with no training or safety protection has been sentenced to 10 years in federal prison. Duane “Butch” O’Malley, 59, was also ordered to pay restitution of $47,086 to the U.S. Environmental Protection Agency (EPA) related to the cleanup of illegally disposed asbestos, as well as a $15,000 fine, according to an EPA announcement.
During O’Malley’s trial, the government presented evidence that his firm, Origin Fire Protection, was hired by Michael Pinski in August 2009 to remove asbestos-containing insulation from pipes in a five-story building in Kankakee, Ill. Neither O’Malley nor his company was trained to perform the asbestos-removal work, and O’Malley agreed to remove the asbestos insulation for an amount that was substantially less than a trained asbestos abatement contractor would have charged for the job.
O’Malley arranged for another individual, James Mikrut, to recruit and oversee workers to remove the asbestos.
O’Malley was charged in June 2010 with five felony violations of the Clean Air Act. He also violated EPA regulations when his workers stripped the asbestos insulation from the pipes while it was dry and then placed it in more than 100 large, unlabeled plastic garbage bags. The bags were dumped in an open field in Hopkins Park, resulting in soil contamination. The workers hired by O’Malley were exposed to asbestos-laden dust and fibers, which can be inhaled into the lungs and cause serious health problems, including lung cancer and mesothelioma.
O’Malley was convicted by a federal jury on Sept. 26, 2011, for the illegal removal, handling and disposal of asbestos. Federal District Court Judge Michael McCuskey handed down the 10-year sentence.
“To increase his profits, a jury found that O’Malley knowingly disregarded federal environmental laws that require asbestos-containing materials be safely removed and properly disposed,” said U.S. Attorney Jim Lewis, Central District of Illinois. “This sentence is a consequence of the defendant’s flagrant disregard for his workers, the public and the environment in exposing them to dangerous airborne asbestos fibers.”
Michael Pinski, 42, entered a plea of guilty on Aug. 19, 2011, to one count of violation of the Clean Air Act. James Mikrut, 49, pleaded guilty on Aug. 24, 2011, to five counts of violation of the CAA. The sentencing hearings for Pinski and Mikrut will be scheduled at a future date.