“While we are postponing, life speeds by.” -Lucius Annaeus Seneca
The Market Update, in existence since 2012, is published on a weekly basis and is intended to be a source of lumber and commodities information for the present & future and pricing trend information. We appreciate receiving some of this information from Do It Best Corporation and from Random Lengths.
Builders values the opportunity to serve its customers in Colorado & Nebraska and provide you with Lumber & Panel price guidelines as well as Commodities information.
THE BOTTOM LINE:
Builders price motion this week:
We are in a wait and see mode for the results of the Anti-dumping against Canadian softwood. Predicting a 5-8% additional “tax”. No formal word has been released yet. This is expected to start another round of increases, but no one knows just yet.
Futures finished essentially flat for the week with November at a $20 discount to today’s cash price, sending mixed signals.
Pricing continues to move up across the board. Now that the order files have extended, talk of summer shutdowns are floating. Expect more of the same this week as we near month end.
Be cautious of any quotes that have not been accepted yet and make sure our customers are aware of the moving market.
Price Change From Prior Week – 6/23/17 vs 6/16/17
Mills continue to move pricing up as order files move farther into July. Pricing is firm to up in all zones. Demand has been solid and should continue to be the case for the next 4-6 weeks. As a result, prompt wood will remain scarce. This issue will be compounded by the current transportation shortage. Please don’t forget that the week of July 4th will be a short shipping week. We recommend 45-60 days of inventory between what you have on the ground as well as purchases in the pipeline.
Southern Pine Plywood:
This week didn’t set any records for sales. Mills are quoting 7/3 or sooner in most cases and took small counters on rail cars to get the product off the floor. Trucking is a nightmare and loads are shipping anywhere from one to two weeks late. Keep an eye on inventories!
Western Plywood had a very active week, moving order files out and numbers up. The activity started late Thursday of last week and continues on through today. Mills order files are 7/10 for most mills and most items. All segments participated (trucks & cars, and in all areas) which normally makes for a stronger, longer sustained market increase. Trucking continues to be an issue in all areas. Even paying more to secure trucking has come up without trucks. Look for numbers to continue to move up.
Sales of Western Spruce were steady this week, and Mills enjoyed yet another week of increased volume and firmer prices. Wholesale and distribution sales were also stronger as some could not wait for carload shipments to replenish their inventory. Mill order files are the second and third weeks of July, which should keep prices firm to higher. We are expecting to see the anti-dumping duty determination today, which could put additional pressures on availability and price.
Eastern mills saw steady interest all week as buyers continued to fill holes, but resisted speculating further than that. Uncertainty surrounding the anti-dumping duty was most likely the reason for the measured purchasing.
Prices of 2×4 and 2×6 random gained $7-$10 while studs saw a little interest with 2×4-9′ adding a few dollars and 2×4-8′ stayed flat. Mill order files are into the week of 7/10 or sooner and with trucking becoming a serious problem again new orders may not arrive until the week of 7/17, so plan your needs accordingly.
July trade consolidated yesterday making an inside day of a lower high and higher low compared to Wednesday. The feature to the day was spreading as traders moved positions out of July and into September. Short covering opened July $1.70 higher at $361.80. Once the early buying subsided, July moved lower on mixed selling before finding support into the 200 day moving average at $359.30. The low on the day was set at $359.10. Prices toggled back and forth the remainder of the session as traders look to even positions ahead of the AD determination decision today. Traded months were higher to unchanged on the day. Volume remains light and was higher with open interest losing 44 contracts. July call options were lower while put options moved higher, 478 to 444 in risk defined hedging strategies. Should you have questions concerning forward pricing, or basis trading for Q3 & Q4 2017 inventory needs, contact your Do it Best trader. July support is found at the $362.70 short term momentum, the $362.00 June 12/17 weekly low, down to the weekly low at $357.40. Upside resistance can be found at the $364.50 daily near term trend, the short term trend at $365.40 up to the weekly high at $370.00.
Southern Pine – All Zones:
The SYP market is still struggling to try to find consistent trading levels. Numerous conditions are causing log shortages, late shipments, and a variety of problems keeping pricing in check. Buyers are still watching for low numbers and quick shipping. Be cautious of the holiday week, this may hinder quoted ship dates, so be prepared for late shipments.
Last week was a very active market in the West. The market has continued to move this starting on Wednesday with White Fir and Hem Fir moving off the bottom. One producer came in with over 30 carloads and sold them in a matter of moments. Studs continue to move upwards and excess is gone. Studs moved last Friday and the carry-though has been good all week. The mills are feeling better about the market. We continue to suggest that you keep 45 days of inventory in your yard.
Green Doug Fir mill sales maintained last week’s strong pace. Demand was steady and sustained for the entire week. As a result, mills were able to continue to increase levels for the week as buyers accepted the higher levels with little resistance. Prices at the mill for 2×4/2×6 began the week at $305/$405 and ended at $415/$415. Green Doug Fir 2×4-8′ stud sales were also strong this week with prices at the mill starting the week at $410 and finishing at $420. Outlook is for prices to continue to move up and suggested coverage is at least four weeks.
Do it Best members should continue to expect generally prompt delivery service through our reload channel. However, delays for mill-routed LBM shipments – particularly those originating in much of the South and Southeast – are intensifying. We expect moderate delays on mill-routed orders in these regions to continue over the next 30-45 days and caution that more extended delays are occurring. All members are encouraged to communicate regularly with their LBM representative regarding delivery schedules for mill-routed orders and to discuss sourcing options when appropriate.
Railcar volume across industries continues to strengthen; total carloads shipped last week were 6.2% higher than the same week a year ago (source: Association of American Railroads). Diesel fuel prices declined moderately again this week, falling $0.035 to a national average retail price of $2.489 per gallon (source: U.S. EIA). We reiterate our caution from the past several weeks that very strong demand for truck service continues to increase truck freight rates.
Price increases – Sheathing:
Price increases – Drywall:
Drywall market orders:
If you already placed “specs to follow” orders at the market, please contact your account executive with your firm specs to ensure shipment before June 30, 2017.
Price increases – Ceiling Tile:
Federal tax credits for VELUX products:
There are federal tax credits on VELUX Solar Powered Fresh Air Skylights and VELUX Solar Powered Blinds that qualify under Solar Electric Property when you purchase and install from January 9, 2009, through 2021. The chart below shows which products qualify for this credit.
- 2009-2019 Save 30% Federal tax credit
- 2020 Save 26% Federal tax credit
- 2021 Save 22% Federal tax credit
Your customer keeps a copy of the receipt of purchased products and installation costs and attaches it to a completed Manufactures Certification Statement. At tax time, the customer needs to fill out the IRS Residential Energy Efficient Property Credit Tax Form 5695. These tax forms can be found at irs.gov. For more information visit veluxusa.com/taxcredits