Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Jan. 26, 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.
Sales activity at SPF mills notched lower as more buyers stepped away to digest or turned to secondaries to fill needs. Mill order files stretching into the latter half of February influenced buyers’ decisions. Mills raised quotes little after early increases.
- Southern Pine traders reported a mix of customers scrambling to cover needs while others digested prior purchases. Sales activity at the mill level remained good, and order files extending two to three weeks, or even longer in some instances, kept upward pressure on prices.
- Coastal species prices maintained their upward ascent. Some significant price spreads between mills remained in play. Buyers purchased the occasional carload or maxi truckload at significantly higher levels. Although some producers noted a slightly slower sales pace, limited supplies and strong order files provided ample strength.
- Inland lumber producers were “flat out busy,” according to one industry guru, representing a solid consensus among Inland mills. Some producers pushed hard on prices near the middle of the week, attempting to slow the demand to some degree. Failing in that tactic, they raised prices further.
- Stud sales remained strong, and prices continued to gain. Any exception to strong sales was usually found in 2×6 8 feet. Meanwhile, ample strength in 2×4 9 feet persisted.
- Radiata Pine industrials come with a caveat: anyone wanting Shop must take a specified volume of Mldg&Btr.
- Ponderosa Pine industrials were reported strong in both 5/4 and 6/4 Shop, with buyers continuing to call producers regularly to assess availability. Ponderosa Pine Selects were stable and priced firmly. Commons, on the other hand, showed some availability to traders who had not been able to source them in any volume for some time.
- No notable increased or decline of sales activity was reported in the Western Red Cedar market. Some producers continued to press prices higher with some success. Reports of buyers’ resistance to the higher prices were mixed.
The pace of OSB activity accelerated this week as producers went on and off the market, transportation issues persisted, and order files moved out. Prices lurched ahead by double digits, and the intensity of buying picked up with dealers looking towards the spring and bullish building permit numbers.
- Most Southern Pine plywood traders reported brisk sales, prompting mills to raise prices more aggressively while maintaining lead times of three to four weeks. Mill sales volumes increased from prior weeks in most instances as yards came back in to replenish inventories. Wholesalers were also active.
- Sales activity was strong in the Western Fir plywood market. Producers extended order files into the latter half of February, with some lead times stretching into early March. A wide range of buyers participated.
- Canadian plywood saw another exciting week as buyers grabbed up whatever was available and followed price increases unflinchingly all the way. Order files are out as far as 10 weeks.
- Particleboard and MDF markets continued to show modest signs of improved sales. Buyers participating minimally in the market earlier this month came back in to place orders consisting of a little more volume. Even though order files are not extensive, buyers often looked for quick shipping volumes.
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Masonite acquires U.K.-based door maker
Masonite International Corporation, the Tampa, Fla.-based door maker has acquired DW3 Products Holding Limited (DW3).
DW3 is a U.K.-based provider of premium doors and window systems that supplies doors under a number of brands including Solidor, Residor, Nicedor, and Residence. The company maintains locations in Stoke-on-Trent and Gloucester, England and has approximately 300 employees.
For the 12 months ended December 2017, DW3 has net sales of approximately 45 million pounds (US$63.57 million). Masonite paid 70 million pounds (US$99 million) for all of DW3’s outstanding shares.
“DW3 fits exceptionally well with Masonite’s existing business in the U.K.,” said Tony Hair, Masonite’s president, global residential. “Their online quick ship capabilities and product portfolio both complement and expand the strategies we are pursuing in this important market.”
Solidor utilizes an online offering, including a door designer and a specialized online portal, which allows trade customers to specify and purchase products online, Masonite said.
“DW3’s products and service model are a natural addition to Masonite’s business, and Masonite is an excellent cultural fit for our company,” said Gareth Mobley, CEO of DW3. “We are excited about the opportunities this will bring our employees and customers.”
DW3 is Masonite’s eighth acquisition in the last four years, and the fourth in the United Kingdom during that period.
Last November Masonite reported third quarter 2017 net sales increased 6% to $518 million from $490 million in the same period last year. The manufacturer will report its Q4 2017 and year-end sales on Feb. 21.
Sales up, earnings down for Scotts Miracle-Gro
The Scotts Miracle-Gro Company reported first quarter 2018 sales of $221.5 million, up 7% from first quarter 2017 sales of $207.4 million a year earlier.
Following the report, Wall Street hammered the company’s stock, which dropped 14.2% on Tuesday.
Sales for the Hawthorne segment increased 20% to $76.7 million while U.S. Consumer segment sales were flat at $125.9 million, the Marysville, Ohio-based company said. The Hawthorne Gardening Company focuses on hydroponics, cannabis plants and urban gardening.
The lawn and garden products supplier also reported a loss from continuing operations of $20 million for the first quarter. Scotts Miracle-Gro noted that “due to the seasonal nature of the lawn and garden category,” the company reports a loss each year during its first quarter.
Scotts reported a first quarter 2017 loss from continuing operations of $58.1 million. Overall, the company posted a net loss of $21.2 million for the quarter compared to a net loss of $64.9 million during the first quarter 2017.
“As we prepare for the start of the lawn and garden season, our core business is on pace with our internal expectations and we continue to expect solid consumer and retailer engagement once the weather breaks,” Jim Hagedorn, chairman and CEO of Scotts Miracle-Gro, said in a prepared statement. “In our Hawthorne segment, growth was driven by acquisitions. Excluding acquisitions, sales declined roughly $12 million from the prior year, which we attribute to the slower-than-expected pace of regulatory changes in California.”
Hagedorn said that while the company views the recent slow-down within Hawthorne as temporary, it has continued into the second quarter. “We now expect full-year organic sales growth at Hawthorne will be flat assuming a return to normal market conditions in the second half of the year. Our long-term prospects for this business remain unchanged and we continue to see Hawthorne having strong long-term growth,”
Regarding the passing of the Tax Act, Scotts Miracle-Gro was complimentary and noted that employees will reap the benefits.
“We appreciate both President Trump and Congress showing the courage to address the uncompetitive nature of the corporate tax structure in the U.S.,” Hagedorn said. “While our shareholders will benefit from this reduction, our associates will as well.”
Hagedorn said that the company expects the first 20% of tax savings will result in higher wages for hourly associates and improvements in the Scott’s benefits programs.