Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Oct. 19, 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 improved, although much of the attention among buyers was directed toward 2×4 #2&Btr. Strong futures gains early, driven in part by fund buying, propelled buyers back into the market to cover needs. Increased demand absorbed surpluses at Southern Pine lumber mills, stabilizing prices early and then lifting them considerably by Thursday. Buyers flocked to mills to take advantage of low prices, needing to bolster inventories. Buyers entered the Coastal species lumber market in greater numbers early, absorbed what mills had on the ground and provided impetus for mills to raise prices. Yards bought greater volumes, having run inventories thin, and mills received immediate destinations for orders purchased by wholesalers. The Inland species lumber market continued a modest rally with excess inventories being cleaned up and prices firming. The action was focused mostly on the narrows of Hem-Fir/White Fir, but Fir-Larch producers saw a fair amount of business as well. Moulding and Shop prices remained firm and unchanged for both Radiata Pine and Ponderosa Pine. The absence of buyers from the Selects and Commons market continued to plague Ponderosa Pine board producers. Inland producers reported sales in the $500-505 range for both 1×6 and 1×12 #2&Btr. Sales volumes for Eastern White Pine remained steady and prices were firm. Continued steady demand for ESLP kept prices firm or up slightly. Buyers seemed more concerned with the mix and shipment time than the price. Western Red Cedar mills reported quieter sales activity for prompt shipping volumes. Both big boxes and their distribution networks spent the week lining up volumes for 2013.
Panels: OSB producers reported steady sales and stronger prices, as buyers returned for another round of buying. Although buying was widespread, the South and Mid-Atlantic regions saw the most activity. Sales activity in the Southern Pine plywood market improved to its strongest level in several weeks. Much of the demand was focused on rated sheathing, which extended lead times for those items out into the week of October 29. Urgency among some Western Fir plywood producers to sell significant volumes of sheathing early forced deep discounts into the market – some upwards of $25. Buyers purchased enough volumes to force prices to bounce. Many Canadian plywood buyers stayed on the sidelines, as the market searched for a solid trading level. Some producers were firm at published levels. Others had wood to move and were willing to discount. Particleboard producers noted a little better pace in their market. The added demand often equated to producers struggling less to move a week’s worth of production. The market for MDF has calmed. However, customers are still on allocation and happy to get what they can. Mills continue to carry lengthy order files.
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Construction debris and e-waste recyclers team up
Green Energy Renewable Solutions has entered into a joint venture with eCycling USA to expand its Construction & Demolition Debris (C&D) deconstruction plans to include electronic and whiteware waste using a proprietary system developed in Germany. ECycling USA has already partnered with the German firm, called Adelman Umwelt GmbH, to implement 100 electronic waste (e-waste) demanufacturing and materials reclamation sites across the United States. Adelman currently has 60 plants operating throughout Europe.
Worldwide revenues from e-waste recovery were reported to be $8.5 billion in 2009 and are expected to grow to $13 billion by 2014. Currently, 3 million tons of e-waste is produced annually in the United States. Less than 20% of this amount is recycled and the annual amount will exceed 10 million tons by 2017.
Of the 3,321 U.S. recycling companies, only 78 provide some form of shredding, and none can process both e-waste and whiteware (e.g., refrigerators) at the rates that the eCycling USA/ Adelmann system can, as well as segregating the raw materials for sale in commodities markets, according to the two companies.
The Green Energy/eCycling USA site in Detroit is planned to be the model for planned U.S. expansions. In addition, the CEO of eCycling USA, Chuck Vollmer, is the founder of the Jobenomics national grassroots movement (Jobenomics.com). Jobenomics plans to create thousands of new Detroit small businesses related to Green Energy/eCycling USA operations, the announcement said.
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Lowe’s reveals succession plans
An Oct. 19 article in the Wall Street Journal reported that home improvement giant Lowe’s is working on a succession plan to replace current chief executive Robert Niblock, 50, within three years. Quoting sources close to the company — Lowe’s would not comment on specifics for the article — the newspaper reported that some board members are growing restive with Lowe’s reliance on technology to grow sales.
The CEO search could be connected closely to the retailer’s search for a chief merchandising officer, a position that might have an inside track to the CEO suite, according to the report.
Lowe’s previous executive VP merchandising, Bob Gfeller, left the position last May, when he was promoted to the position of customer experience design. Lowe’s also needs to hire someone to head its logistics and distribution after promoting Mike Mabry, now head of digital interfaces, as part of its May management shake-up.
One obvious candidate for the CEO’s job, company veteran Greg Bridgeford, has made it clear he has plans to retire shortly, according to the WSJ article. The 58-year-old executive, who joined Lowe’s in 1982, served for years as executive VP business development before taking the newly created position of chief customer officer in May.
Lowe's is also undergoing
Lowe's is also undergoing layoffs at the corporate office in a stealth manner to keep it out of the spotlight. These layoffs are small and staggered across different groups at the corporate office. In the past 2 days there have been over 125 people eliminated from their jobs for no reason. Management told employees that the purpose was to reach a 10% reduction in expenses and performance was not a factor in deciding who would be cut. These layoffs will continue over the next few months as each group has a dead line to meet a reduction threshold.