RISI Crow’s Market Recap for June 1
SPF price adjustments were minimal; meanwhile, OSB activity was serene but markets were firm.
A price index of lumber and panels used in actual construction for June 1, 2018.
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.
SPF price adjustments for most key items were minimal as buyers continued to take a breather. News of the CP rail strike prompted some producers to go off the market until an agreement between the two sides was announced several hours later. A July futures contract discounted significantly to cash prompted buyers to purchase late summer needs from the board.
- Trading in Southern Pine remained active, although the pace eased. Price increases reflected a calmer market and order files in many instances extending into the latter half of June. Digestion, vacations taken after the long holiday weekend and rains from Subtropical Storm Alberto were reasons given for the more pedestrian pace.
- A moderate pace, described by one producer as “more of a grind,” took the wind out of Coastal species price momentum. Despite mills producing more dry Doug Fir when possible, green prices flattened. Yards once dependent on SPF continued to substitute Doug Fir.
- Despite slower calling rates, Inland lumber producers reported that they were “selling good volumes.” Only 2×12 #2 showed weakness, as it has over the last several weeks. Prices were otherwise flat or slightly improved in both Fir-Larch and Hem-Fir.
- Limited volumes of studs available in markets kept moderate upward pressure on many prices. “They’re tight,” noted a trader. Mill order files extended into the latter half of June and, for some items, as far out as early July.
- Ponderosa Pine Commons continued to show lethargy in #2. The #3 and #4 Common were moving reasonably well at unchanged prices. Industrial prices were unchanged in a modest-paced week.
- Western Red Cedar producers often reported steady sales activity. Dry weather in the West kept volumes flowing out of yards in that region. Traders cited high costs of framing lumber for buyers’ hesitancy to speculate on cedar volumes.
In most regions, OSB activity was serene but markets were firm. The U.S. South slowed with heavy rain. Eastern Canada was the exception, with producers OTM, files into July, and an underbought market panicking.
- Southern Pine plywood producers reported a moderately slower pace, but pricing remained solid to higher. Coming off a holiday and rains in the Southeast were cited as reasons for the drop-off in activity. Strong order files extending as far out as the first week in July contributed to higher rated sheathing quotes.
- After a slow start following the long holiday weekend, Western Fir plywood producers experienced an increase in activity by the middle of the week. Mill order files often moved into the week of June 25, with more minor volumes available the week prior.
- The Canadian government announced a retaliatory 10% tariff on US plywood late in the week, sending Canadian plywood into a frenzy. Pricing rose eight points from last week. Producers and distributors went OTM as prices skyrocketed.
- Both particleboard and MDF producers reported few changes in overall steady market activity. Prices held up, although discounted particleboard in the East was apparent. Meanwhile, attempts to raise both particleboard and MDF prices in reaction to higher resin costs and escalating freight rates were also evident.
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U.S. LBM expands its holdings
The acquisition-oriented dealer adds Arizona’s R&K Building Supplies.
U.S. LBM Holdings, the pro dealer and distributor of specialty building materials, has acquired Arizona’s R&K Building Supplies.
Founded in 1974, R&K Building Supplies distributes lumber and a broad line of specialty products, such as windows, doors, millwork, insulation, trusses, lumber and other materials, to contractors and homeowners from its 20-acre location outside of Phoenix. R&K’s facilities include sales offices, showrooms, a lumberyard, truss plant and multiple warehouses.
R&K President Chad Coons will be retiring from the company in the coming months and his son Chip Coons, currently vice president of R&K, will continue as president.
“We congratulate Chad for his many successful years leading R&K and are excited to welcome Chip and the R&K team to U.S. LBM,” said U.S. LBM President and CEO L.T. Gibson. “R&K shares our values of operational excellence and continuous improvement, and this new partnership brings another market leader into the U.S. LBM fold, complements our recently-opened Rosen Materials location in Phoenix and expands our presence in a growing construction market in the Southwest.”
U.S. LBM was advised by Honigman Miller Schwartz and Cohn LLP.
Not counting R&K, US LBM operates 31 divisions. The company was formed in 2009 as a collection of largely autonomous lumberyards. In July of 2015, private equity firm Kelso & Company entered an agreement to purchase a majority of the equity interests in the company.
Marcus Lumber hosts U.S. Senator
In Iowa, Senator Chuck Grassley pressed the flesh at a newly remodeled store.
Iowa’s United States Senator Chuck Grassley made a public appearance with Marcus Lumber at their recently remodeled store in downtown Marcus, Iowa.
Grassley, an 84-year-old Republican, visited the fourth-generation family business during his traditional annual tour of all of Iowa’s 99 counties. At Marcus Lumber, the senator toured the new facility, posed with staff, and answered topical questions from a host of visitors.
Marcus Lumber toured their updated and expanded facilities with Grassley giving him a first-hand look at the lumber business and small family run businesses in general.
Following the tour, a short question and answer session took place involving Marcus Lumber team members as well as other local community leaders. Many topics we’re discussed including education, renewable fuels, the farm bill and rising healthcare costs. Marcus Lumber’s leadership was also able to address the many ongoing business- impacting trade agreements involving steel and lumber products. Grassley provided insight on many of the issues presented and recognized the uncertainty impacting famers and business owners.
Senator Grassley commented, “I can tell you the President believes being unpredictable is to his advantage [in these trade talks}. Things are changing every day but recently there appears to be a small light at the end of the tunnel.”
Marcus Lumber is a family owned and operated home center serving all of Northwest Iowa since 1920.