Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Sept. 29, 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.
Sales activity in SPF took on a slower pace, but extended mill order files allowed western producers to nudge quotes slightly higher and enjoy success at the new levels. Eastern producers raised prices more aggressively. Prompt availability was very limited, especially for key items, but when it did appear it was purchased with little hesitation.
- Price gains for Southern Pine remained strong, although increases were not quite as lofty as the prior week. Producers also reported a slower sales pace. Mill order files often extended a solid two weeks. Buyers often looked for the quickest shipping availability from mills.
- A combination of decent sales activity and limited availability continued to press Coastal species lumber prices higher. Buyers remained cautious in light of high price levels, but inventories remained lean, forcing them to participate.
- Inland lumber producers reported the entire spectrum of Std&Btr/#2&Btr lumber moved briskly, with demand exceeding supply at this point. Field inventories are lean, and mill inventories are strong, bolstering an already solid market.
- Most stud prices ended the week flat to moderately higher, but momentum continued to subside a bit. Some availability remained tight while other items continued to loosen up.
- Radiata Pine Mldg&Btr and Shop remain unchanged in price, although Shop has increased in the volume of its offerings from New Zealand.
- Ponderosa Pine Mldg&Btr remained stable in both 5/4 and 6/4, following the slight slippage in 5/4 last week. The moderate action in Ponderosa Pine boards in recent weeks has put a slight imbalance between supply and demand. Among the items noted for their strength were 1×12 in both #2 and #3 Common.
- Western Red Cedar buyers addressed near term needs by purchasing only those volumes they can sell before the end of their building season. High prices kept them from considering purchases beyond that time.
Activity in OSB was split this week, with the west sides of the United States and Canada quiet, while Eastern Canada and the U.S. South were busy. Broadly, however, buyers remain extremely cautious about taking on volume with prices escalating.
- Sales activity in the Southern Pine plywood market abated. Distant order files generated more hesitancy among buyers, although good sales activity at yards brought buyers back into the market to again cover needs. Wholesalers pulled back because of those order files, which extended from mid-October all the way out to November 13.
- Price movement was minimal in the Western Fir plywood market, but any changes were upward. While buyers stepped back to assess their positions and digest prior purchases, producers leaned in part on order files, exhibiting little or no urgency to sell at a more robust pace.
- Canadian plywood markets kept trying to find a trading level this week, which sources said they feel may be close. Buyers are afraid of slipping prices, and buying conservatively. The fundamentals of thin inventory and good field demand remain in place.
- Particleboard producers reported decent sales, with some mills in the East experiencing slightly better activity than the week prior.
- MDF sales picked up for some producers in light of recent production curtailments at a few mills.
For more on RISI, click here.
Masonite acquires door wholesaler
Masonite International Corporation completed the acquisition of A&F Wood Products, Inc. a wholesaler and fabricator of architectural and commercial wood doors in the Midwest United States.
Founded in 1968, AFWP offers door and hardware distributors with wood doors, hollow metal doors, custom metal frames, wood frames and hardware with quick ship capabilities. The sellers will retain the use of the A&F brand for use with a separate pocket door frame business they will continue to operate.
Terms of the acquisition were not disclosed.
“AFWP’s ability to provide quick ship custom machined and finished wood doors, hollow metal doors and related products to door and hardware distributors is a natural complement to Masonite Architectural’s manufacturing business,” said Graham Thayer, senior VP and business leader of Masonite Architectural. “This transaction demonstrates our commitment to improving responsiveness to our customers with short lead times, additional products and value-added services. We are excited to welcome the AFWP team to the Masonite Architectural family.”
AFWP employs approximately 50 people at a single site in Howell, Michigan and net sales for the twelve months ended May 31, 2017 were approximately US $14 million. Masonite expects the acquisition to be immediately accretive to our Adjusted EBITDA margin. Masonite has a long history as a supplier of door products to AFWP.
HBSDealer Stock Watch: Tepid gains to start quarter
While the broader stock market started the fourth quarter on a strong note Monday, industry stocks had modest success, led by HBP’s 3.40% increase. In contrast, SHLD fell 3.01% and TREX was down 2.93%.